NET NEUTRALITY DoT Committee Report May 2015

ACKNOWLEDGEMENTS

“Appreciation is the highest form of prayer, for it acknowledges the presence of good wherever you shine the light of your thankful thoughts”

ALAN COHEN

Every journey starts with a step. The committee commenced its journey in the midst of a vigorous debate that questioned different dimensions – constitutional, economic, technical and commercial. During its journey through consultative pro- cess, the committee was exposed to the wisdom existing in the digital community in India including civil society, OTT players, Telecom Service Providers and others. toThe the committee vexed issue. was The gratified committee by the takes approach this opportunity adopted by to thankall participants one and all in who the travelledconsultations with to the constructively committee on support this journey and advise for their the committeeconstructive in approach,finding a path the studied advice and support. The committee hopes that its report will be under- stood in this spirit of constructive co-operation. Our nation faces several develop- mental challenges and many of these challenges can be resolved through solutions emerging from the digital space. The committee has drawn inspiration from this thought and approached the issue with the diligence expected of it and is conscious of the burden that its recommendations may affect the course of policy for years to come.

First of all, the committee would like to thank all participants in consultations and respectfully acknowledges their contributions and advice. The volumes of sugges- tions, data, research papers and supporting documents presented to the committee represent the robust and active participation of all participants in this consultative exercise. No other consultation exercise in the Department of Telecommunications has seen the participation of such a wide range of participants from academics to activists and service providers to users. agencies that helped us examine the issues from different public policy perspec- tives.The committee The committee has also is benefittedindebted to from Shri the G Pinputs Srivastava provided and by Shri other Shrikant government Panda from the Department of Telecommunications for their valuable contribution.

The committee constituted a Working Group to sift through the mass of suggestions and papers and assist it in its work. Immense effort has been put in by this working group to do the background research and spent many sleepless nights in stitch- ing together the wide diversity in thoughts encountered during consultations. The completion of the report would not have been possible in the short time that it had but for their dedicated efforts. Our special appreciation goes out to this group of young, dynamic officers - Abhay Shanker Verma, YGSC Kishore Babu, N S Deepu, whoBrajesh worked Mishra, tirelessly Radhacharan and cleared Shakya, the J. pathRamesh, for us Bijoy to bring Kumar clarity Nath, in G. our Brahmaiah, journey. Gulab Chandra Rai, R. Saji Kumar, Ritu Pande, Jitendra Kumar and Pankaj Salodia

The committeecommittee isrecognises indebted tothat these some young work officers has been and wishesdone, a them lot more a bright is needed future. to mull over these recommendations and translate them into policy actions. The committee hopes that its recommendations bring some clarity to a heated debate and brings all players in digital space together in carrying forward the enormous for whom the digital space can be liberating. potential that exists in our country to fulfil the aspirations and dreams of the young The committee submits this report and hopes that as one journey ends, another starts in a spirit of constructive co-operation.

(Chairman) A.K. Bhargava

A.K. Mittal Shashi Ranjan Kumar (Member) (Member) (Member) V. Umashankar

G. Narendra Nath R.M. Agarwal (Member) (Member Convener)

Contents

CHAPTER 1 - INTRODUCTION...... 9

CHAPTER 2- NET NEUTRALITY – THE WAY WE UNDERSTAND...... 12

CHAPTER 3 - NET NEUTRALITY – INTERNATIONAL SCENARIO...... 16

...... 20

CHAPTER 4 - STAKEHOLDER PERSPECTIVE OF NET NEUTRALITY ...... 32

CHAPTER 5 - INNOVATION, INVESTMENT & ENTREPRENEURSHIP...... 35

CHAPTER 76 - INTERNET:PUBLIC POLICY FREEDOM PERSPECTIVE OF EXPRESSION OF NET NEUTRALITY AND USER RIGHTS...... 41

...... 44

CHAPTER 8 - OTT SERVICES AND IMPACT ON TELECOM...... SECTOR 50

CHAPTER 9 - NET NEUTRALITY & IMPACT ON TSPs ...... 54

CHAPTER 10 - TRAFFIC MANAGEMENT & NET NEUTRALITY ...... 61 CHAPTER 11 - CONTENT DELIVERY, INTERCONNECTION & MANAGED SERVICES ...... 65

CHAPTER 12 - TARIFFS & NET NEUTRALITY ...... 71

CHAPTER 13 - LEGAL, LICENSING & REGULATORY...... ISSUES 76

CHAPTER 14 - SECURITY & PRIVACY ISSUES ...... 79

CHAPTER 1516 - ENFORCEMENT,WAY FORWARD...... OVERSIGHT & CAPACITY BUILDING 82

CHAPTER 17 - SUMMARY OF RECOMMENDATIONS...... 85

...... 90

ANNEXURE-I - NOTIFICATION OF GOVERNMENT ...... 91

ANNEXURE-II - LIST OF INVITEES / PARTICIPANTS...... 97

ANNEXURE-III - LIST OF RESPONSES RECEIVED...... 102

GLOSSARYANNEXURE-IV...... - SUGGESTED GUIDELINES 103

REFERENCES...... 105

NET NEUTRALITY - DoT Committee Report - May 2015

CHAPTER 1 INTRODUCTION

“The internet is a reflection of our society and that mirror is going to be reflecting what we see. If we do not like what we see in that mirror the problem is not to fix the mirror, we have to fix society.”

— VINT CERF

1.1 The Internet has transformed the world and society like never before. It has provided a platform for new opportunities through innovation. Internet has fostered the supremacy of ideas rather than capital. It is a universal platform that uses the same standards in every country, so that every user can connect to every other user with physical distances becoming irrelevant in the networked world. The Internet is a public resource that has no ownership, but is available to all those who are digitally connected.

1.2 In India, tremendous growth in telecommunications and convergence of communication and information technologies has created a unique digital platform for advancing the developmental goals. Digital India programme envisions access to digital infrastructure as a utility to every citizen, thereby making available high speed broadband internet as a core utility for delivery of services to citizens. The program envisions e-governance and services on demand and aims at digital empowerment of citizens.

1.3 India has demonstrated to the world its capacity to develop innovative business models in affordable mobile telephony suited to the requirements of a developing country. It has 997 million1 telecom subscribers and 99.20 million broadband subscribers with an access to internet at speeds higher than 512 kbps. Out of about 300 million2 subscribers accessing the internet,

wire line media. Currently, both broadband and internet penetration in India isaround comparatively 93% subscribers low in the are global on wireless context. media, whereas 7% are on fixed

1 2 IAMAI Report The Indian Telecom Services Performance Indicators, October – December, 2015; TRAI report Jan 2015 9 Chapter 1 - Introduction

1.4 The telecom industry worldwide has experienced a paradigm shift from traditional voice to data. The rapid adoption of smart devices, availability

of useful applications and online services are leading to significant amount tremendousof data traffic increase over the in networks.consumption The of increase bandwidth. in internet In India, and despite broadband rapid growthpenetration in data with in recent the humongous years, voice growth continues in datato be traffic, predominant has led in to the a

years, the growth in voice revenues is slowing down and may perhaps start reducingtelecom space in coming both inyears. terms of revenues and traffic. However, in the last few

1.5 There is a constant pressure for investment in network infrastructure and to expandIn India, capacities Internet trafficand increase is likely penetration. to increase Telecommanifold infrastructure, in the next few being years. a

meet the network capacity demands brought about by increasing broadband penetration,capital intensive increasing industry, speeds will require and increasing significant data investments usage. Telecom by operators service to providers have also started facing competition from unlicensed application platforms, termed Over-the-Top (OTT) players, in their traditional voice

to face competition from OTT players, telecom service providers have been exploringcommunication new opportunities field. With an forobjective generating of enhancing revenues revenue from users streams and andthe content providers. Some of the models attempted by TSPs, such as charging

and providing the content free to users (called “zero rating” plans), have raisedhigher concernsdata tariffs about for VoIP Net services,Neutrality. charging This phenomenon content application is not uniqueproviders to India but has been witnessed across the world.

1.6 In March 2015, the Telecom Regulatory Authority of India (TRAI) issued a consultation paper titled “Regulatory Framework for Over-the-Top (OTT) Services” wherein the issue of Net Neutrality in the backdrop of OTT services came to the fore. TRAI has stated that the objective of the consultation paper was to elicit views arising from the implications of the growth of OTT services bringing disruptive changes to the traditional revenue models and to consider whether changes were required in the current regulatory

Net Neutrality. framework. The TRAI consultation paper sharply intensified the debate on 1.7 Department of Telecommunications constituted a committee chaired by

10 Member (Technology) on January 19, 2015 to examine the issue of Net NET NEUTRALITY - DoT CommitteeChapter Report 1 - -Introduction May 2015

reference are available at Annexure - I. Neutrality. The notification constituting the Committee and its terms of 1.8 The committee has met different stakeholders, including content and application providers, Multistakeholder Advisory Group (MAG) formed

providers, civil society, associations, academia and requested inputs from key departmentsby Department of Governmentof Electronics of &India Information to elicit their Technology, views on telecom Net Neutrality service and the terms of reference. Details of stakeholders and representatives - Annexure - II. In addition, the committee also took note of the TRAI consultation paper, written invited/participated in the consultations are at details available at Annexure - III. submissions, emails & representations received in the Department as per 1.9 The Committee has observed few contextual trends that impinge on its recommendations, namely; the developmental objectives of Government enunciated through “Digital India” and “Make in India” and the need to foster innovation and investments. To achieve these developmental objectives; the Internet - that is open, democratic, affordable and non-discriminatory will play a critical infrastructural role. The emergence of unlicensed OTT players in communication services including traditional voice communications competing with licensed service providers have raised concerns regarding differential regulation of substantially the same service.

1.10 The committee took note of wealth of data and information available in public domain including best practices being adopted by various countries on the whole gamut of issues while preparing the report. The report examines the issue of Net Neutrality in a comprehensive manner taking views and demands of different stakeholders into consideration before making appropriate recommendations. The methodology adopted has been broadly assimilative, analytical and participative.

1.11 The Committee has carefully followed the debate that has been developing in the country for the past few months. The dominant medium of debate has been the on-line universe which itself underscores the criticality of the issues raised. Discussions in the print and electronic media have created a new awareness while participation of Civil Society has given it a new

in its deliberations. The Committee has also taken note of a very enlightening debateperspective. on Net This Neutrality entire discourse in the Parliament. has immensely Committee benefitted recognises the Committee that the issues raised and concerns expressed would need to be comprehensively addressed with a national perspective keeping public interest at the fore. 11 CHAPTER 2 NET NEUTRALITY – THE WAY WE UNDERSTAND

“I read, I study, I examine, I listen, I reflect and out of all this I try to form an idea into which I put as much common sense as I can.”

— MARQUIS DE LAFAYETTE

2.1 Open and non-discriminatory access to the Internet has revolutionized the way people communicate and collaborate, entrepreneurs and corporations conduct business, and governments and citizens interact. This has led to rapid growth in people-to-people, business-to-people and government-to- people communications shaping new forms of social interactions, businesses and governance. Thereby, Internet has emerged as a fount of innovation in all aspects of human life facilitated by the open, easy, inexpensive and non-discriminatory access to the Internet and the related investments in

to be carried. The debate on Net Neutrality has sprung from the desire to preserveconstructing and protect high speed the open networks nature enabling of the public the explosionInternet arising in data from traffic the apprehensions of emerging new business models that may impinge on the inherent characteristics of the Internet as we know today.

2.2 understood as a network principle of equal treatment of data packets moving acrossThere isthe no IP standard networks. definition The concept of Net has Neutrality. been used Netmore Neutrality broadly to is describe globally the open and non-discriminatory access to the Internet. Attempts have been

detailed below: made by many to define the contours of Net Neutrality. Some of these are

- (i) Thelieves Body that ofa literal European interpretation Regulators of fornetwork Electronic neutrality, Communications for working (BEREC) has attempted a definition of Net Neutrality. BEREC be

12 NETChapter NEUTRALITY 2 - Net Neutrality- DoT Committee – The Way Report We -Understand May 2015

purposes, is the principle that all electronic communication pass- ing through a network is treated equally. That all communication is treated equally means that it is treated independent of content, ap- plication, service, device, sender’s address, and receiver’s address. Neutrality towards the sender and receiver address implies that the treatment of data packets is independent of both users – sender and the receiver - at the edges of the network.

(ii) Professor Tim Wu, who coined the word “Net Neutrality”, had the fol- - sign principle. The idea is that a maximally useful public information networklowing to aspires state: “Network to treat all neutrality content, sitesis best and defined platforms as a equally.network This de allows the network to carry every form of information and support every kind of application”

(iii) For other proponents, Net Neutrality means ensuring that all end us- ers are able to access the Internet content, applications and services of their choice at the same level of service quality, speed and price, with no priority or degradation based on the type of content, appli- cations or services. Under this view, data is transmitted on a “best effort” basis, with limited exceptions.

2.3 On the Net Neutrality continuum, there are two views on the opposite sides of the scale.

2.3.1 On one side of the scale, the view held is that every user must have equal access, via the internet and, more generally, electronic communications networks (regardless of distribution platform) to all of the content, services and applications carried over these networks, regardless of who is supplying or using them, and in a transparent and non-discriminatory fashion. Putting this view into practice comes up against a variety of constraints, such as

the need to install mechanisms to comply with legal obligations, maintaining acceptablehaving to protect level of theQoS networks for some real from time attacks, services and etc. from Therefore, problems the of network traffic,

practices adopted may or may not be acceptable from the Net Neutrality pointhas to of be view. managed with traffic management tools. The traffic management

bandwidth of the Net is limited. There are users who require a whole lot more 2.3.2 There are other considerations as well. Unlike an infinite resource, the

13 Chapter 2 - Net Neutrality – The Way We Understand

bandwidth than, say, someone sending emails. If someone is using Skype or YouTube, he needs a lot of bandwidth and that too on priority without any

significant delay, otherwise the service quality suffers. It can be argued that he should pay a higher price because he is using more space and his traffic shouldneeds to also be besent treated on priority. in the sameBut Net way Neutrality as others proponents on best effort say basis. that neither he should be given priority, nor he should be charged higher and his traffic 2.3.3 Moreover, all data packets are not created equal. Data packets of different

emergency service information versus another packet carrying video informationapplications etc.)(e.g. havean email different packet characteristics and a VoIP packet, and they a data need packet different carrying type of treatment on the network for a variety of reasons. The concept of “One size

between different types of data packets so that they can be treated differently. Therefore,fits all” does the not puritan work and view networks of Net Neutrality are inherently has practicaldesigned limitationsto differentiate and it does not work in the real world. In a pure world of data, there will be differentiation between data packets for one reason or the other, technology also permits this and therefore exceptions will have to be made within the overall principles of Net Neutrality.

The crux of the debate is about striking a balance between the two views.

2.4 Net Neutrality is often misunderstood as akin to the concept of Open Internet, which is a much larger all-encompassing description. Open Internet is the idea that the full resources of the Internet and the means to operate on it are easily accessible to all individuals and businesses. Open Internet is not limited to network operations alone but includes Internet Governance, open standards and protocols, transparency, absence of censorship, and low barriers to entry. Open Internet is expressed as an expectation of decentralised technological power equally exercisable across the user community, and is seen by some as closely related to open-source software. Proponents often see Net Neutrality as an important component of an Open Internet, where policies such as equal treatment of data and open web standards allow those on the Internet to easily communicate with each other without interference from a third party.

2.5 The commitment to Net Neutrality, explicitly and implicitly, has been expressed by countries and regulators across the world. However, there is also no doubt that the concept of Net Neutrality would need to be circumscribed

14 NETChapter NEUTRALITY 2 - Net Neutrality- DoT Committee – The Way Report We -Understand May 2015

by certain unequivocal conditions that do not breach the core requirements of Net Neutrality as it is commonly understood. These conditions include the intrinsic need to protect networks from disruptive attacks, the management

maintenance of acceptable levels of quality of service (QoS) for some real timeof the services flow of etc. Internet This requires traffic, the network need to to comply be managed with legal with obligations, acceptable

2.6 toolsAlso rforelevant traffic to management. the issue is the nature of network development brought about by investment in infrastructure. Networks that rely more on optical

by user. Spectrum resource being inherently limited brings technological fibre (fixed) than spectrum (mobile) are less impervious to network demands which has the capacity to expand to accommodate increased demands on itslimitations bandwidth on resources. QoS for Internet Communications delivery over in India mobile has unlike developed optical relying fibre on mobile as the preferred medium so much so that currently 98% of all subscribers are wireless customers unlike most other countries in the world.

2.7 Reasonableness and transparency requirements imply identifying

that commercial considerations cannot form the basis for acceptability. Principles“acceptable” such and as “unacceptable” network limitations, practices congestion of traffic management. management It andis certain legal public policy requirements amongst others can be permissible approaches

2.8 to acceptable traffic management on the Internet. Neutrality but assimilate the core principles of Net Neutrality and shape the The crux of the matter is that we need not hard code the definition of Net actions around them. The Committee unhesitatingly recommends that “the core principles of Net Neutrality must be adhered to.”

15 CHAPTER 3 NET NEUTRALITY – INTERNATIONAL SCENARIO

“The Internet is becoming the town square for the global village of tomorrow”

— BILL GATES

3.1 Internet has created new business models reshaping the economic society globally. The Internet economy has created value through ideas incubated by start-ups in content and application development. The network operators have attempted to create a value proposition by leveraging their control over

network operators has been witnessed world-wide and has given birth to thenetwork issue traffic.of Net Neutrality.The competitive The Committee conflict between felt that application it would be providers instructive and to understand and learn from the policy and regulatory responses adopted by countries and regulators globally. The Committee studied the legislative and regulatory provisions in different countries on Net Neutrality in particular and approach to the Internet in general from the open sources. This section encapsulates the study of the international scenario.

3.2 on the issue, and in a few other countries the issues surrounding Net NeutralityThe Committee were noticedbeing deliberated. that only a Netfew Neutrality countries haveis a complex taken a issuefirm position and has

economic conditions. Accordingly, each country adopts different responses todifferent the issue. nuances On the specific basis of to measures a country undertaken depending onon Net-Neutrality,its social, political nations and can be divided in the following three categories:

a) CountriesAustralia, Republicwhich have of Korea, taken New no specificZealand. measures as the existing mechanism is often considered sufficient to address the issue e.g.

16 NET NEUTRALITYChapter 3 - Net - DoT Neutrality Committee – International Report - May Scenario 2015

b) Countries that have adopted light-touch regulatory measures through transparency, lowering switching barriers, minimum Qual- ity of Service (QoS) requirements etc. e.g. European Commission,

Japan, United Kingdom. measures to enforce Net Neutrality principles (no blocking, no dis- c) Countries that have taken or propose to take specific legislative - criminationlands, Singapore, in treatment USA (FCC of rules) traffic etc), subject to reasonable traffic management and other exemptions. e.g. Brazil, Chile, France, Nether 3.3 The general categorization listed in the previous paragraphs hides some of the nuances that need to be highlighted in the context of the debate on Net

Neutrality in India. These country-specific nuances are detailed below:

a) Chilemay not was arbitrarily the first nation block, to interfere enact Net with, Neutrality discriminate principles against, into hinlaw- inder July or restrict2010. The the mainright legalof any principles Internet userlaid downto use, are send, that: receive (i) ISPs or offer any legal content, application or service on the Internet, or any

management and network administration that does not affect fair competition;kind of legal Internet(iii) ISPs activity shall protect or use; the (ii) privacy ISPs may of the undertake users; (iv) traffic the users are free to add or use any kind of instrument, device or equip- ment on the network, provided they are legal and do not harm or adversely affect the network or quality of the service (vi) ISPs shall ensure transparency by publishing details of Internet access offered, its speed and the quality of the connection, making a distinction be- tween national and international connections, and shall include in- formation about the nature and guarantees of the service.

b) Norwegian Post and Telecommunications Authority (NPT) pub- lished “Guidelines for InterNet Neutrality” in February, 2009, after

principles, namely: (i) Internet users are entitled to an Internet con- consultations with major stakeholders. The guidelines define three are free to send and receive content of their choice, use services and runnection applications with a predefined of their choice, capacity connect and hardwarequality; (ii) and Internet use software users of their choice that does not harm the network; (iii) Internet users are entitled to an Internet connection that is free of discrimination

17 Chapter 3 - Net Neutrality – International Scenario

with regard to type of application, service or content or based on - tor’s own network to block activities that harm the network, comply withsender orders or receiver from the address; authorities, (iv) Traffic ensure management the quality of on service an opera for

temporary network issues. specific applications that require it, deal with special situations of c) South Korea is the most wired country in the world with the largest -

Neutralityoptical fibre but penetration has published and “Guidelinesthe highest forinternet Network speeds. Neutrality The coun and try has not officially adopted any legally binding decision on Net content, application, service, and non harmful devices or equipment freely.Internet Traffic Management”, which includes the right to use lawful

d) UK follows a light-touch regulatory approach. OFCOM has not im-

existing regulation and market structures. ISPs follow a voluntary codeposed of strict practice restrictions which onwas traffic developed management, by stakeholders. but instead However, relies on few of the major ISPs have refused to sign the Open Internet Code of Practice.

Internet (The Civil Internet Regulatory Framework) in April 2014 e) Brwhichazil hasgives recently legal backing passed ato legislation enforcement known of Net as theNeutrality Marco Civilprinci da- ples.

f) The debate on Net Neutrality has occupied regulatory, political and judicial mind-space in the United States of America (USA) for some time. The Federal Communications Commission (FCC), the commu- nications regulator in USA, declared a set of regulations for an open Internet in 2010. The necessity for these regulations arose from dis- putes that arose between ISPs and application service providers (e.g.

outComcast with av consultationNetflix). These paper regulations in May 2014 were that challenged asked for in a U.S response, Courts amongstby ISPs and other were questions, struck down to a in query January as to 2014. whether Thereafter, ‘paid prioritisa FCC came- tion’ that permits ISPs to charge content providers to provide greater bandwidth for their end-users, should be allowed. FCC was swamped with over a million mails in response to the consultation paper. The

18 NET NEUTRALITYChapter 3 - Net - DoT Neutrality Committee – International Report - May Scenario 2015

recent FCC rules announced in February 2015 have been decided by the regulator with a slim 3-2 majority and have been promptly chal- lenged in U.S Federal Courts on grounds of breach of constitutional guarantees – the First and the Fifth Amendments. The FCC regula- tions adopt 3 bright line rules for Net Neutrality i.e. “no blocking”, “no throttling” and “no paid prioritization”. Reasonable network management practices are permitted only for managing the techni- cal and engineering aspects of the network and not to promote busi- ness practices. ISPs are also required to publish consumer friendly information about their practices to maintain transparency.

3.4 countries who have taken active position on Net Neutrality. These include noDespit blocking,e differences, no throttling, certain commonno paid prioritization,principles can befreedom identified of access across andthe

mentionto receive are or the use need content, for transparency, no discriminatory prescription practices, of reasonableQoS, low cost traffic of management and support for innovation. Other issues that find common

switching etc. However, on some issues like zero rating and VoIP, countries nothave allowed, taken widely in UK andvarying Italy position. there is noFor restriction example in on USA, differential VoIP as charginga managed of service does not come under the Internet Rules, in Brazil blocking of VoIP is

3.5 VoIP and in South Korea, TSPs/ISPs can charge for mobile VoIP. between competing positions and interests in Net Neutrality debate, while Apparently, countries all over the world are grappling to find balance

Inmaintaining its recently sufficient released leeway report for larger“2014 publicWeb goals.Index”, Very Web few Foundation countries have has foundopted forin its specific study legislationsacross 86 countries for enforcement that 74% of of Net countries Neutrality lack provisions. clear and

The international best practices along with core principles of Net effective Net Neutrality rules and/or show evidence of price discrimination. Neutrality will help in formulating India specific Net Neutrality approach. Considering the large internet user base and the critical role that Internet plays in our economic, social and political space, India should take a rational approach and initiate action in making an objective policy, specific to the needs of our country. The timing for this is apt, taking into consideration the exponential growth of content and applications on the Internet.

19 CHAPTER 4

OF NET NEUTRALITY STAKEHOLDER PERSPECTIVE

“We may convince others by our arguments, but we can only persuade them by their own.”

— JOSEPH JOUBERT

4.1 The increasing importance of the Internet for society has led to an intense debate about how to preserve and enhance this shared resource as an

players, consumers and civil society have equal stake in how internet is run.open Therefore, platform forgovernment all communications. and regulator Besidesobviously the have operators responsibility and OTT to consult the stakeholders before arriving at any policy formulation on an important issue like Net Neutrality.

4.2 To understand the stakeholder perspective in detail, different stakeholders

centred around the Terms of Reference of the committee. The stakeholders expressedwere invited their by viewsthe Committee on a range for of discussions.issues including By and Net large,Neutrality the discussions principles,

competition, security and privacy, peering arrangements, interconnection traffic management, licensing and regulation, charging of content providers,

viewsissues, expressed public internet by the versus stakeholders managed during services, the discussions VoIP services, are levelsummarized playing below,field, positive categorized discrimination, under different innovation, issues. zero It may rating, be added public here policy that etc. these The may not be exhaustive and may not be accurately categorized due to reason of maintaining brevity.

4.2.1 NET NEUTRALITY PRINCIPLES

a) In general the OTT players want strict implementation of Net Neutrality.

20 NETChapter NEUTRALITY 4 - Stakeholder - DoT Committee Perspective Report of Net - MayNeutrality 2015

b) The Multistakeholder Advisory Group (MAG) formed by the Depart- ment of Electronics and Information Technology is a mixed group with representatives from different stakeholder groups. Many MAG members categorized Internet as public good and asked for uphold- ing of important concepts like Net Neutrality, Net Equality, Equal Ac- cess and Internet for all. Since access is a major issue in India, Net Neutrality policy should be aimed at increasing access but core prin- ciples of Net Neutrality like no throttling and no blocking should be - dom of expression as guaranteed under the constitution. Overall, the Internetenforced. has Internet been successful is a platform because where of one openness can exercise and supporting his/her free in- novations and absence of requirement of permission to operate and this scenario should continue. c) The civil society members consisted of individuals as well as con- sumer group associations, who had mixed views on Net Neutrality. Underlying view of most of Civil Society members was- one should - ternet i.e. “all of the internet, all of the people, all of the time”. The corefollow principles the fundamental of Net Neutrality principle ofare Tim no Burnersblocking, Lee no in throttling regard to and In no prioritization of any data or site. User rights and connectivity are most important. There is no need to provide certain rights to certain

- sis;intermediaries No Negative and discrimination; destroy the fabric Transparency; of the web. Internet “Brightline based rules” ser- vicesshould should be in placenot be like degraded - Networks due shouldto specialized deliver onservices; Best Effort positive ba discrimination in certain forms can be allowed subject to conditions. d) All the major Telecom Service Providers, who participated in the dis- cussions, supported Net Neutrality but were of the opinion that Net

principles like no denial of access, no unreasonable discrimination Neutrality has to be defined in Indian context. It should be based on e) (price,In the viewpriority, of Industry traffic management), associations, fairthere and are reasonable three aspects practices. to Net

(ii) Open and non-discriminatory access to the public internet; (iii)Neutrality WWW, debatethe content –(i) Issue part and of level content playing neutrality. field (OTT Net Neutrality v/s TSP); doesn’t mean free access – neither free access to the user nor free

21 Chapter 4 - Stakeholder Perspective of Net Neutrality

access to the content provider. It is related to “equal access” to all. Therefore, Net Neutrality is an “access” related issue. Accordingly, minimum Net Neutrality requirements are non-discriminatory and equal access. Net Neutrality should be adapted in India having broad - - features-(i) Absence of unreasonable traffic discrimination; (ii) En- hanced internet access; (iii) Open internet / no blocking / no throt principlestling; (iv) Facilitationshould be declared of innovation; by the operator.(v) Reasonable traffic manage ment and prioritization (good for the end user). Traffic management 4.2.2 TRAFFIC MANAGEMENT

a) OTT players want no fast lanes, no blocking, no throttling and no data prioritization.

b) According to MAG, since the application mix on the internet is varied so the internet has been designed to handle differential service class-

has also prescribed standard methods to handle differentiation. Even LTEes, for has which different different classes traffic of service. management This differentiation tools are available. is required IETF to improve user experience. Consumption always has power law distri- bution i.e. small number of users will always consume large fraction

be addressed by differential pricing or via differential service grade. of service / bandwidth and so they need to be controlled. This can

Traffic management is also required for prioritization of emergency services. Some participants were of the view that TSPs/ISPs should c) Innot the have view discretion of Civil Societyin traffic participants, control. if, at all, there has to be pri- oritization, it has to be service agnostic so as to maintain Net Neu- - agement practices should be declared for users to make informed choice.trality. Network management has to be transparent and traffic man

management for many reasons, like e.g. maintaining the health of d) Innetwork, the view emergency of TSPs/ISPs, services traffic etc. management is a must for network

e) In the view of industry associations, Internet is not designed to treat

all packets as equal. There are classes, priority flags etc. to manage 22 NETChapter NEUTRALITY 4 - Stakeholder - DoT Committee Perspective Report of Net - MayNeutrality 2015

volumes,the traffic manageon the Internet. emergency Therefore, and time Net Neutralitycritical services, cannot beprotect there againstin absolute malware, sense. control Traffic in managementcase of data usage is essential exceeding to threshold, - manage congestion control etc.

4.2.3 LICENSING AND REGULATION

a) OTT players are of the opinion that public policy should be holistic and not based on a single industry. The current legal framework in India with the Indian Telegraph Act, Information Technology

additional laws are required. Therefore they are not in favour of a licensingAct, Broadcasting and regulatory Laws, Competitionregime for OTT Act players.etc. are If,adequate at all, any and kind no of regulation is needed, it should be ex-post regulation (regulated after).

b) In the view of MAG players, the IT act does not address issues like blocking, throttling etc. The Telegraph act doesn’t cover information services. As per Indian Telegraph Act, voice is licensed no matter who provides it in whatever form. Therefore, OTT communication

regulation. Some other MAG participants were of the view that Licensingproviders leads may to be monopolization licensed/regulated, and cartelization. with some lightSo Internet touch should remain self-regulated. Regulation should be done only if there is proven market failure either for TSPs or OTTs or for curbing illegal practices.

c) According to civil society members, at the heart of the Net Neutral- ity debate is the discrimination between the “infrastructure layer” (carriage) and the “applications layer” (content). The carriage has to be separated from content. Telecom policy is grounded in users rights with components like common carriage, compulsory carriage and compulsory interconnection to ensure seamless telecom ser- vices to users. However, in the internet era, there are new concepts regarding service; QoS consideration, Smart pipe etc. not covered by law. Regarding contents, 95% of the contents on the net don’t pose problems to anyone. e.g simple services like web pages, E-commerce, applications which make life simple like taxi application, ticketing

applications etc. They should be spared from licensing/regulation. 23 Chapter 4 - Stakeholder Perspective of Net Neutrality

Some participants did not want any regulation because they feel reg- ulation will kill the content sector.

Some civil society participants said that few major content creators in the market are debarring the content creation within the coun- try. Regulation should address this issue. Further, regulation has to

address two conflicting issues and create a balance – create a level d) Inplaying the view field of for some all but of the also TSPs, not to OTTs create need hurdles not be for licensed new start-ups. but some

touch regulation of OTTs. However, OTT communication services es- sort of registration / authorisation is required. They support light-

policy.pecially VoIP need to be regulated, as they are cannibalising the rev enues of TSPs/ISPs. They advocated for ‘same service- same rules’ e) According to industry associations, the telegraph act mentions “pub- lic” telephony. Word PLMN also means “Public” Land Mobile Network. Therefore providing services to the “public” comes under the section 4 of Indian telegraph Act. Since public telephony is licensed and regu- lated and same should be applicable to OTT communication services also.

4.2.4 CHARGING OF CONTENT PROVIDERS ISPs by way of hosting charges, connectivity charges, domain reg- a) OistrationTT players charges said that etc. theTherefore, content providersthere is no are reason already to payingcharge TSPs/ them additionally for content also. In their view charging leads to discrim- ination between different content providers.

b) According to MAG, in one economic view, discrimination is legiti- mate; but social acceptance is low for price discrimination. For pur-

they encompass all types of applications. In case of price discrimina- pose of discrimination, OTTs should be carefully defined because and mandate minimum bandwidths. tion, government/regulator should prescribe floor and ceiling prices c) According to TSPs, for the internet revolution to happen in India,

- data prices for retail customers have to be kept low. Every MB of data 24 is subsidized and only 1/6th of the cost is realised. This subsidiza NETChapter NEUTRALITY 4 - Stakeholder - DoT Committee Perspective Report of Net - MayNeutrality 2015

tion can happen from voice revenues only. Therefore, communica- tion OTTs have to be reasonably charged as well as regulated. It was also said that OTTs be asked to pay infrastructure charges to TSPs after certain threshold.

4.2.5 COMPETITION

a) In the view of MAG, vertical integration by TSPs/ISPs is not desirable b) Inand the internet view of should civil society, remain service flat. providers can act as gatekeepers thereby affecting competition. In the past, service providers have pre- vented competitor’s entry for years, and were levying high charges.

march of technology and have to cope with technological evolution. Now they intend to make Internet use difficult. They cannot stop the c) According to TSPs, Market forces will take care of anti-competitive practices.

4.2.6 SECURITYa) In theAND view PRIV ofACY OTT players, generally security issues are always brought forward to suppress competition and increase regulation. This practice should be discouraged. OTT players are also serious

country, not following security norms etc. are false. players and allegations like fly by night operators, no investment in

b) Innot the personal view of information MAG, traffic privacy. blocking should be done only in cases of security threats. IT act provides privacy of sensitive information &

c) According to civil society, security is a significant issue in VoIP and it d) mayAccording be addressed to TSPs, byData targeting Privacy, specific Safety and needs. National Security requires at least minimum regulatory enforcement on OTTs as well. TSPs are - cerns are not taken into consideration for OTTs. They should be asked asked to stop service/ intercept etc., but OTTs are not. Security con

overseasto register OTT with players security are agencies. bypassing Bare the minimumnational security requirements and privacy have laws.to be satisfiedSo our country by OTT –needs by placing to enter servers into inbilateral India. According agreements to TSPswith

25 Chapter 4 - Stakeholder Perspective of Net Neutrality

those countries to protect the security and privacy in our country.

- here to security requirements. OTT players should also be subjected e) toAccording same requirements. to industry associations, TSPs/ISPs are required to ad

4.2.7 INTERCONNECTION AND PEERING

a) MAG participants said that empirically validated model proves that revenue asymmetry causes paid peering, which is good for user. Paid peering gets content closer to the customer and hence “loads faster” and makes it more attractive. Regulatory oversight of interconnec- tion is required to preserve Net Neutrality.

b) According to civil society, “Infrastructure” and “Content” operate on different layers. Termination charges make sense at the infrastruc- -

contentture/network layer where layer, wherethe content one networkresides. Interconnect connects to anotherregulation net is importantwork. There to shouldsee that be ISPs no terminationdon’t exploit charges content at providers. the application/ This is also required to increase transparency and preserve competition. It was also suggested that NIXI should be opened up to all network

neutral manner. operators and not just the licensed ISPs for exchanging traffic in a

India, and NIXI was created for this purpose, but the OTTs violate c) Athis.ccording to TSPs, domestic IP traffic is supposed to remain within

4.2.8 PUBLICa) In INTERNET the view ANDof civil MANAGED society representatives, SERVICES Internet based services should not be subjected to licensing. Specialized services need to be regulated after dialogue. Regulatory parity can be there between specialized service and traditional telecom services, but not with In- ternet based OTT services.

b) According to TSPs, Net Neutrality principle is applied only for retail broadband or public internet. It has nothing to do with enterprise services, which are driven by commercial agreements.

c) According to industry associations, Enterprise services are different

26 NETChapter NEUTRALITY 4 - Stakeholder - DoT Committee Perspective Report of Net - MayNeutrality 2015

from public internet and therefore such services are kept away from the scope of Net Neutrality issues. Even FCC has recognized this and they have kept such services out of the “open internet rules”. Enter- prise services are tailor made, SLA based, one-to-one arrangement between the TSP and Enterprise. These are commercial arrange- ments with guaranteed QoS, SLAs etc. and therefore are kept out of the Net Neutrality debate.

4.2.9 ABOUT VOIP SERVICES - - a) over,In the OTT view services of OTT haveplayers, helped VoIP to has increase hardly theimpacted consumption the voice of reve data nues of TSPs/ISPs as the proportion of VoIP calls is very less. More

by end users, which in turn is increasing the revenues of TSPs/ISPs, b) whichAccording is actually to MAG, benefitting clear distinction them. is required whether OTT com- munication is “service” or “content”. Communication services need

license just like the TSPs & ISPs. Some participants also demanded c) unrestrictedAccording to VoIP. civil society, competing applications like voice OTT services were eroding revenues of the government and the TSPs, creating security and privacy concerns, causing direct as well as

to all OTT players in partnership with the TSPs, as they are already licensed.indirect losses. That will Therefore, take care government of various issues should like allow lawful full VoIPinterception, services

d) Asecurity,ccording privacy, to TSPs, taxation, licensed issue TSPs of have level suffered playing lossfield on etc. international

of Rs.750000 crores till now, and for the next 5-6 years at least Rs.500000traffic due tocrores the OTT has players.to be invested. Industry IndiaInvestment needs isinfrastructure of the order investment, which is now getting threatened by OTT players due to arbitrage. Therefore, the OTTs also should be subjected to the same regulatory regime as the TSPs and same service - same rule should

1200be applied crores to on them TSP revenue. as well. Impact on revenue – Even if 1% VoIP substitutes 1% of TSPs voice traffic, then it will have an impact of Rs

27 Chapter 4 - Stakeholder Perspective of Net Neutrality

e) According to industry associations, in addition to Net Neutrality, there is also the concept of “Net Equality”. If we compare a poor guy with featureless phone and another guy using a smart phone and

pay 30% revenue to the government. OTT players provide similar servicesdoing VoIP but calls pay atnothing. a cheaper As such rate, it where is a loss is tothe the equality? Government. TSPs/ISPs

4.2.10 LEVELa) PLAIn theYING view FIELD of OTT players, when TSPs bid for spectrum, they knew of market risks. Technology continuously changes and now TSPs face business risk. They have to adapt.

big companies, but while operating in India they are not following b) Atheccording LEA security to some norms, MAG members,regulatory Facebook, norms or Google,pay taxes Viber to governetc. are- - fore, same service, same rules should be adopted when comparing TSPsment andetc. ItOTTs is unfair as they to subject are offering only TSPs/ISPs same service. to such Some norms. other There MAG members were of the view that TSP offerings and OTT offerings are

the reason why people come to the internet, which drives data usage different and cannot be equated. Rather OTT /content providers are

c) Aandccording leads to to revenues civil society, for TSPs/ISPs. parity between OTT communication and Telecommunication need not to be aimed at, as they operate differ- ently.

d) According to TSPs, OTT players are competing with TSPs, who are regulated. Government has to look into this aspect of regulated vs unregulated and same service same rule should be applied.

e) According to industry associations, principle of “same service, same rules” should be followed.

4.2.11 POSITIVEa) According DISCRIM toINATION MAG, if government wants to give services free on the internet (like zero rating), it is considered as positive discrimination and not seen as violation of Net Neutrality. Therefore, it should be permitted in public interest. Government can provide Zero rated

28 NETChapter NEUTRALITY 4 - Stakeholder - DoT Committee Perspective Report of Net - MayNeutrality 2015

channels to citizens for essential services (public interest zero rating), based on clear public policy and principles and on non-commercial terms.

b) In the view of civil society, regulation should address the negative externalities, to keep them in control and not impede positive

zero rating, network should provide access to all users in a neutral manner.externalities. Since Regarding the Government prioritization focuses on for public government good, the websites act of the / government needs to be viewed differently from the act of private industry. They are not on the same footing. Government can do prioritization of citizen services or zero rating, where the services are free for all users irrespective of the access network used by them.

4.2.12 a)INNO VATIONIn the view of civil society, end to end principle should be followed. Innovation happens at the edge of the network (content creation) and drives the need of users for network access. Therefore, government should try to maximize the end to end connectivity without promoting any kind of silos.

b) According to TSPs, Innovation cannot be the prerogative of one player in the ecosystem. Innovation happens not only on the content side, but also on the network side. Network side innovation is also important and cannot be ignored or prevented.

4.2.13 ZERO RATING

a) Amongst OTT players, there are mixed views. There is some difference of opinion among large and small OTT players. Large OTT players say that Zero rating helps to increase Internet penetration because Internet access is offered free. It is part of marketing of services. There are many Zero rating models – (i) Internet.org is free to users, free to operators, non-exclusive – open to any operator. Motivation of Internet.org is to provide access. (ii) Sponsored data are acceptable models in many countries. On the other hand, smaller OTT players consider Zero Rating as discriminatory and against the principles of Net Neutrality because they feel that they don’t have the

overresources others. to enter into such arrangements with TSPs/ISPs. Also such arrangements influence consumer choice to prefer the free content 29 Chapter 4 - Stakeholder Perspective of Net Neutrality

b) According to some MAG members, it should be market specific Someand not other TSP/ISP MAG participantsspecific. Zero were rating of theshould view be that, allowed if the withpurpose some is toregulation promote and access, not only then on instead the content of “zero but rating”, also on give the pipe/download. certain amount of free data with unrestricted access to any content.

c) Among civil society participants, there are views both in favour and against Zero rating. According to some members, “Zero rating”

service, which we have to see to decide what constitutes violation services exist in different flavours. It is the scope and size of the Worldwide there is a practice of “Give free” to “Get rich”. This is done of Net Neutrality - Is it discrimination? Is it product differentiation? zero rating services follow this view. They are giving the internet accessin every (of market; certain then websites why apply only) restrictions free to the only user to to Telecom? promote Most the usage of their services. Some civil society participants said that “Zero rating” is a short term approach to bring people on the internet, as it violates core Net Neutrality principles. If the goal is to take the internet to the masses, there are better ways than “zero rating”. There

have achieved this goal by many innovative methods. e.g. voucher are some examples of Bangladesh, Sri Lanka, Philippines where they

d) Asystemccording for tointernet TSPs, zeroaccess rating in Sri is Lanka, an innovation free wi-fi to in increase Philippines internet etc. penetration and attract users to it. Sometimes customers ask for Al-a-carte service – (Say Rs 15 for whole month for Facebook).So product offerings for the user have to be designed that way and zero rating is also a product offering.

e) According to industry associations, “Zero Rating” is a commercial arrangement and not related to Net Neutrality. Commercial arrangements come under anti-competitive laws and should be taken care of under the same. So “zero rating” can be kept out of the purview of Net Neutrality. Some participants were of the view that instead of zero rating, free internet can be given. Free internet for initial internet users matter. If someone has never experienced

marketing techniques. internet before, giving him free for the first time matters. These are

30 NETChapter NEUTRALITY 4 - Stakeholder - DoT Committee Perspective Report of Net - MayNeutrality 2015

4.2.14 a) PUBLIC A POLICYccording to civil society, from a public policy perspective, it needs to be considered that India is a paradox – 80% is yet to be connected, but it also has the 3rd largest Internet user base. Therefore, creation of infrastructure is more important because it extends connectivity. The internet is popular because of content. If it has some value for the user, the user will pay to the ISP to access that content. Hence content creation is important and needs to be protected.

b) According to TSPs, they are committed to Net Neutrality but the principles should be applied uniformly to all players in the ecosys- tem end to end. TSPs have said that OTT interests have to be seen separately from Net Neutrality as they are different issues. However, communication OTT and Non Communication OTT should be treated separately.

c) According to industry associations, Net Neutrality has to be dis- cussed under the larger umbrella of internet governance involving international organizations like ICANN and ITU. Net Neutrality ben-

cost of a much larger population not having access to the internet. efits only a small section of the population with smartphones at the can give appropriate direction to the Net Neutrality debate. In the NetBut Neutralitylarger consumer debate, interest government should intervention be the prime should objective, not interfere which with commercial agreements. Government should only specify the principles (e.g. interconnection, regulation etc.)

Discussions with various stakeholders on range of issues related to Net Neutrality have set the context and the basis of analysis for the committee.

31 CHAPTER 5

ENTREPRENEURSHIP INNOVATION, INVESTMENT &

“An entrepreneur searches for change, responds to it and exploits opportunities. Innovation is a specific tool of an entrepreneur hence an effective entrepreneur converts a source into a resource.”

— PETER DRUCKER

5.1 The principles governing the open internet include the ability of end-users to discover and access lawful internet-based content or applications of their choice and the ability of content and application providers to access end- users “without permission” from network operators. This open internet has

across a wide range of economic and social activities. Those that are successful areyielded able profoundto scale rapidly benefits and through globally innovation in a comparatively in content inexpensive and applications way – a

5.2 keyThe benefitinternet of openness innovation promotes without permission.innovation, investment, competition, and other national broadband goals and the remarkable increase in broadband

infrastructure investment and innovation seen in recent years confirms the throughsame. Both innovations within the in relation network to and network its edges, enhancement investment and and internet-based innovation contentis flourishing and applications due to its basiccan be principles. expected to This continue. pattern of a virtuous circle

5.3 Intuitively, openness and low barriers to entry are central to innovation ‘without permission’ fostered through growth of internet-based content

all new entrants at some point, and the power of ideas pushed through theand openapplication internet providers. helped themThe major to establish application themselves. & content Further, providers attaining were the scale inexpensively in comparison to traditional businesses was a key

32 benefit derived from the open interconnectedness of the digital world. NETChapter NEUTRALITY 5 - Innovation, - DoT InvestmentCommittee &Report Entrepreneurship - May 2015

5.4 Open models and interoperable environments drive down the cost of innovation. The lower the costs of entry, the lower the risk to innovators, and more the innovators. An internet based on open standards has proved to be a very effective platform for innovation. This has brought the freedom to innovate to everyone, from the largest multinational to the self-employed. Anyone with an idea can, at least in principle, use the open internet as a vehicle for testing their idea in the market. The result has been an unprecedented explosion in the availability of new content and services to consumers. These have transformed a wide range of economic and social activity, including the way we buy and sell goods, consume content , play games, search for information, participate in social networks, and so on.

5.5 It is universally accepted that innovation spurs investment and generates spin offs in the economy. Examples are airline booking, hotel reservations, taxi transportation etc. where aggregated service sourcing through Internet applications have enabled businesses to reduce costs and design new pricing models tailored to individual customers without the applications provider owning inventory, property or directly providing the end-service. The Internet economy has fuelled innovation at the edges of the network and beyond. This has facilitated better business opportunities and consequential investment in hard infrastructure. On the other hand, there is a separate requirement for investment in networks.

5.6 The innovation in the ICT in India has become an important component in socio-economic development. Internet entrepreneurship today has captured the imagination of the Indian youth. The low cost of bootstrapping a business combined with the creative nature of the Internet has encouraged millions to launch their own ventures. The most obvious impact of the Internet for entrepreneurs is the creation of a whole new segment of online start-ups. Clearly, an open internet is playing catalyst role for innovation and growth.

5.7 Investment in networks is a sine qua non condition for spread of broadband and through broadband, the growth of the Internet economy. If investment in networks falls then the impact would be felt in terms of access, speed and quality of services. This would affect the spread of Internet and use of the Internet for innovation at the edges of the network. Innovators and potential customers alike must have access to high quality and affordable broadband Internet. The network itself must be resilient to promote investments. There is a symbiotic relationship between expansion of broadband

33 Chapter 5 - Innovation, Investment & Entrepreneurship

infrastructure through investment (both Government and private) and the opportunities thrown up by an explosion of innovation in Internet content and applications. One cannot survive without the other. Therefore, innovation and infrastructure have both to be promoted simultaneously and neither can spread without the other. The endeavour in policy approach should be to identify and eliminate actions that inhibit the innovation abilities inherent in an open Internet or severely inhibit investment in infrastructure.

5.8 Internet has been loosely termed as a public good. In traditional economic theory, however, public goods have two characteristics i.e they are non rivalrous in that when a good is consumed or service utilised, it does not reduce the amount available to others and that they are non-excludable in that it is not possible to exclude non-payers from consuming the good or

Network congestion, limited spectrum availability on mobile networks, utilising the service. Both characteristics do not strictly apply to the Internet. services render Internet accessed over telecom networks rivalrous. The pay-to-connectdemands placed principle on network makes including access to spectrum Internet excludable. resources byTherefore, specific Internet cannot be termed as a true public good though to some extent it can be termed as a quasi-public good. Nonetheless, the future character of the Internet as an all-encompassing medium of access to services makes public Internet a social good rather than a pure public utility that it was in the past. In the world of the future, those who remain unconnected to the Internet

economy of the country. This makes the public policy need to stimulate may find themselves excluded from a substantial part of the socio-politico- applications all the more necessary. investment in networks and development of country-specific content and

34 NET NEUTRALITY - DoT Committee Report - May 2015

CHAPTER 6

OF NET NEUTRALITY PUBLIC POLICY PERSPECTIVE

“Wishful thinking is not sound public policy.”

— BJORN LOMBORG

6.1 information and providing a platform for fostering innovation. Internet has functionedThe Internet on from the “end-to-endthe very beginning principle” signified characterised interconnectedness by ‘dumb’ networks sharing carrying information to ‘smart’ terminals. Internet has been a medium that has created innovation in technology, business and governance. Internet has thrown up several challenges for public policy but it should not lead to restrictions both on network creators or network users that unnecessarily

technologies and business models either in telecom networks or the larger economicand unjustifiably world. stifle experimentation and further innovation in

6.2 The open, democratic nature of the Internet has kept information and content accessible by the user largely unrestricted. There is a view that diluting neutrality of the ‘Open Internet’ may compromise the independence and diversity of information. With the explosive growth of social media and the use of Internet as a platform for expression of thoughts and opinions, it has been argued that the equal access to Internet is integrally linked to

should have the ability to choose the content that gets delivered to the user, freedom of expression. The question as to whether the carrier (ISP/TSP) argument in favour of Net Neutrality. The majority view is that only the user shouldand affect have the the basic unbridled architecture right to ofaccess the internet,the lawful has contents formed on athe significant Internet without the carrier having the ability to discriminate – either through price, speed or quality - content available on the Internet. Some proponents of

Net Neutrality while accepting the need for traffic management have argued 35 Chapter 6 - Public Policy Perspective of Net Neutrality

management by carriers should be supplemented by a right of the user tothat seek disclosure additional of information practices (voluntary from them or with mandated) an objective adopted to secure for traffic Net Neutrality.

6.3 The Internet platform has potential to deliver public services to the citizen,

This type of electronic delivery of services is viewed as harbinger of good governance,irrespective enhancing of their social the ability status, of in governments an effective to and reach efficient the unreached manner. and an agent for reinforcing democracy. The extension of broadband services to rural areas and delivery of internet services over it has enormous socio-

another layer of (negative) discrimination against the economically and sociallyeconomic disadvantaged benefits. It is sections feared thatof society violation in the of delivery Net Neutrality of internet may services. impose Conversely, it has also been argued that governments should retain the power of positive discrimination to enable prioritisation of services to meet developmental and delivery challenges such as education, primary health

to determine priorities based on the overall vision without affecting the ordinaryand emergency user’s services.ability to Public access policy information approaches platforms should and allow commercial flexibility services.

6.4 The term “Digital divide” describes a gap between those who have ready access to information and communication technologies and the skills to make use of those technologies and those who do not have such access or skills. Digital inequality transcends economic and social inequality in a world where ICT is at the centre of socio-economic progress. There are two main barriers that come in way of bridging the digital divide, i.e. lack of access to ICT infrastructure and lack of knowledge of its use. Low education levels, poor socio-economic advancement and lack of digital infrastructure and the high cost of such infrastructure act as barriers to universal digital access.

6.5 The correlation between economic growth vis-à-vis increase in broadband penetration has been recognized the world over. The growth is further aided by societal applications like tele-education, tele-medicine, skill development, e-governance, entertainment and employment generation by way of high speed access to information and communication. The 2015 rankings of Networked Readiness Index2 that includes infrastructure as one

2 The global information technology report 2015, World Economic Forum

36 NETChapter NEUTRALITY 6 - Public - DoTPolicy Committee Perspective Report of Net - MayNeutrality 2015

of the parameters places India at 89th position globally. India’s comparative position on some of the important fronts in the digital world has been provided in the World Economic Forum Report 2015. With regard to infrastructure availability and usage, India is placed generally beyond 100th rank but it ranks very high globally on affordability of mobile cellular tariffs

position respectively in 2014. and fixed broadband internet tariffs where it is placed at the 7th and 4th 6.6 As per the TRAI monthly subscription data, the number of broadband subscribers increased from 60.87 million at the end of March 2014 to 99.20 million at the end of March 2015 indicating an annual growth rate of 62.97%. Segment-wise broadband subscribers and their monthly growth rates are as below:

Table 1 : Broadband Subscription Details

Broadband Subscribers (in million) Annual Segment growth rate st st As on 31 As on 31 (%) March 2014 March 2015

Wired subscribers 14.86 15.52 4.44 Mobile devices users 45.61 83.24 82.5 (Phones and dongles) Fixed Wireless subscribers (Wi-Fi, Wi-Max, Point- 0.4 0.44 10

Total 60.87 99.20 62.97 toPoint Radio & VSAT) 6.7 India is unique in the dominance of mobile as the medium of internet connectivity. The chart below indicates that the extent of dominance of

in comparison to other countries: mobile internet as percentage of the total internet traffic as of 2013 in India

37 Chapter 6 - Public Policy Perspective of Net Neutrality

Graph 1: Mobile Internet traffic across countries

6.8 The over-reliance on mobile as the media for internet connectivity has public policy implications in so far as the approach towards Net Neutrality and investment in infrastructure is concerned in comparison to other countries. Firstly, there would a necessity to promote and incentivise investment in

spectrum resources and demands placed by different services on available optical fibre infrastructure across the country. Secondly, the availability of management. Another public policy response would be to make more contiguousspectrum resources spectrum may available require for greater managing recourse the rapidly to network growing and demand traffic for data over the Internet.

6.9 The telecommunications market in India is price sensitive. India has the

increase in mobile penetration has been possible due to the low cost of telecomlowest voice services tariffs aided in comparison by a low-cost to otherdevice countries ecosystem. globally. However, The thesignificant mobile broadband market has not taken off in comparison with other countries due to the comparatively high cost of devices as also the cost of data services. Public policy necessities dictate that an ecosystem approach that aims to lower cost of investment, create publicly funded infrastructure and bring down costs of devices to access broadband must be adopted.

6.10 Digital India Programme is an umbrella programme which aims to transform India into a digitally empowered society and knowledge economy by leveraging IT as a growth engine of new India. Digital India is transformational scheme to also ensure that Government services are available to citizens electronically across the country. The vision of Digital India is centred on three key areas – infrastructure as utility to every citizen, governance and

38 NETChapter NEUTRALITY 6 - Public - DoTPolicy Committee Perspective Report of Net - MayNeutrality 2015

services on demand, and digital empowerment of citizens. It requires that affordable broadband access is available to all for which investment in infrastructure has to be facilitated.

6.11 Public policy interventions require that the State should create and facilitate creation of infrastructure to bridge the digital divide and provide affordable

streams and incentivise investment in network infrastructure supports the abilityaccess. of The the abilityState to of bridge network the digital providers divide to rapidly. generate There sufficient is a possibility revenue that increased data rates3 or reduced investment in expansion of broadband network may inhibit broadband penetration. Affordable access requires an investment climate that reduces costs and supports business models tailored around the ability and willingness of the user to pay for customized service offerings. Market failure in ensuring private investment in broadband infrastructure would require recourse to the Universal Service Obligation Fund for public funding of investment drawing upon scarce public resources. Therefore, public policy intervention needs to ensure that affordable access and investment in broadband infrastructure are not counter-posed against the core principles of Net Neutrality.

6.12 Another element of public policy arising from the Net Neutrality debate is its effect on competition. The endeavour of economic public policy over centuries is to promote competition by peeling away those elements that constrict or constrain competition. Mobile telephony in India is a classic example where

sector owned and later, a closely regulated market. Public policy direction the benefits of competition have been realized in what was earlier a public market dominance by control of factors of production or predatory pricing or adoptionhas been ofto otherregulate unfair anti-competitive trade practices. behaviour The impact of offirms Net thatNeutrality can exercise or the absence of it in the public policy imperative of ensuring competitive markets has to be assessed. The market for Internet content provision depends on eyeballs visited as the measure of content or application access. In the mass of content available in the public Internet, to be easily visible is the best tool for enhancing business. Content providers have an incentive to leverage the

stand above competition. Although such practices may enhance consumer gatekeeper role of networks to collaborate and collude with TSPs/ISPs to 3 For example – in USA, one estimate shows that Net Neutrality could impose anywhere from $10 - $55

each month on top of an average broadband access charge of $30.00 (http://internetinnovation.org/ files/special-reports/Impact_of_Net_Neutrality_on_Consumers_and_Economic_Growth.pdf). 39 Chapter 6 - Public Policy Perspective of Net Neutrality

welfare in the short run, the distortion in content markets would result in immense damage to the fabric of the Internet economy besides affecting the spread of innovation. While it may be legitimate for content providers to use business tools such as advertisements, reaching the consumer through the

the economy. control of access or influence over access may have a deleterious impact on 6.13 Overarching public interest also requires that in the context of Net Neutrality,

delivery of emergency services or desirable public or government services. exceptions be carved out for specific areas of national benefits such as 6.14 To conclude, the primary goals of public policy in the context of Net Neutrality should be directed towards achievement of developmental aims of the country by facilitating “Affordable Broadband”, “Quality Broadband” & “Universal Broadband” for its citizens. The approach accordingly should be

• Expand access to broadband;

• Endeavour through Digital India, to bridge the digital divide, pro- mote social inclusion;

• Enable investment , directly or indirectly, to facilitate broadband ex- pansion;

• Ensure the functioning of competitive markets in network, content and applications by prohibiting and preventing practices that distort competitive markets;

• Recognize unbridled right of users to access lawful content of their choice without discrimination;

of applications relevant and customized for users. • Support the Investment-Innovation Virtuous Cycle and development

40 NET NEUTRALITY - DoT Committee Report - May 2015

CHAPTER 7 INTERNET: FREEDOM OF EXPRESSION AND USER RIGHTS

“Perfect freedom is as necessary for the health and vigour of commerce as it is to the health and vigour of citizenship”

— PATRICK HENRY

7.1 Internet has emerged as a public space where people can freely speak, share, communicate and advocate. It is a vibrant platform for discussion, debate and dialogue where many voices can speak at the same time without one

whether informational or commercial – provide mechanisms for expression ofintruding opinions, into user the reviews other. Besides, or discussion social posts. media More applications, importantly, most the websites Internet – is an equal opportunity platform that offers equal digital space for expression irrespective of age, caste, creed, religion, wealth or gender. In any democratic country that values basic human rights, the need to preserve the Internet as a free space for expression becomes an important element of public policy.

7.2 The development of the Internet as a space that is neither managed nor directly supervised by the State has lent to its growth as an open forum. However, to keep the Internet as an open medium requires certain legal and constitutional guarantees to be built so that these guarantees can be invoked through enforceable mechanisms in case of breach. After all, in the course of history, the basic human freedoms were protected when these freedoms got enshrined in a written constitution that described the obligations of the State in preserving them and creating an independent adjudicatory mechanism that would enforce these fundamental rights in cases of alleged violation by the State.

7.3 was the main channel of public opinion. The press was seen as the public Before the Internet came to occupy the public discussion space, mass media

41 Chapter 7 - Internet: Freedom of Expression and User Rights

watch-dog and protection of media freedom was a key area of judicial

was channelized through editorial supervision. Thereby, there was both a possibilitypronouncements. of capture But mass placed media side-by-side was a space with where self-regulation expression of that opinions kept what society would have considered objectionable or undesirable from coming to the fore. The Internet, on the other hand, is a public sphere where supervision is a practical impossibility. This character of the Internet can be affected if network operators become “gate keepers” gaining control of

andtraffic ISPs channelized State-like powerthrough to thecontrol network the Internet by identification and can affect of the constitutional data packets freedomsflowing through in case it. of This possible technology misuse. called Therefore, “deep packet the obligation inspection” of the gives State TSPs is to ensure that the even the remote possibility of the continued existence Internet as a free public space being compromised needs to be quashed with explicit mentions of what a network operator can do and what it cannot in

ISPs need to be clearly stated from the context of Internet freedoms. relation to the traffic carried by it. The obligations and liabilities of TSPs and 7.4 Internet has evolved as a medium for public discourse affording the ability to citizens in a democratic polity to express their views unhindered and participate in governance activities. It has shaped thoughts, given voice to

that seeks recourse to constitutional guarantees of fundamental rights to ensureideas and that influenced it remains political free and developments. democratic. TheIn an Internet emerging is the digital new mediaworld

emphasized.where the Internet can influence the course of politics, the necessity to keep the Internet free from influences that can be misused cannot be over- 7.5 The right to freedom of expression is a human right under Article 19 of the International Covenant on Civil and Political Rights, which includes freedom of an individual to seek, receive and impart information and ideas of all kinds, regardless of frontiers, either orally, in writing or in print, in the form of art,

otheror through human any rights. other Atmedia a national of his/ level, her choice. freedom It is of key expression to the development, is essential fordignity democracy, and fulfillment good governance of every and person socio and economic is also development. essential for ensuring

7.6 The writers of the Indian constitution understood the importance of civil liberties, as pillars of democracy that need to be protected by the State. In

42 ChapterNET 7NEUTRALITY - Internet: Freedom - DoT Committeeof Expression Report and -User May Rights 2015

particular, the Freedom of expression was seen as the means of formulating public opinion. Therefore, the constitution has guaranteed to all the citizens of India the freedom of speech and expression as one of the fundamental rights. The emergence of social media and technological advancement has added new dimensions to the freedom of expression. For any policy formulation exercise, it is of utmost importance to ensure that freedom of expression is secured in all respects.

7.7 The constitutional guarantees on freedom of speech and expression in the physical space apply equally to such freedoms being exercised over the Internet. Article 19(2) of the Constitution of India places reasonable restrictions in the exercise of the freedom of speech and expression in the interests of sovereignty and integrity of India, the security of the State, friendly relations with foreign countries, public order, decency or morality, or in relation to contempt of court, defamation or incitement to an offence. Thereby, the exercise of freedoms over the Internet cannot be absolute but has certain limitations on grounds mentioned in the Constitution. However,

Government in an accountable manner. the limitations over the Internet can be specified and enforced only by 7.8 The Committee recommends that user rights on the Internet need to be ensured so that TSPs/ISPs do not restrict the ability of the user to send, receive, display, use, post any legal content, application or service on the Internet, or restrict any kind of lawful Internet activity or use. The arbiter of what constitutes legality in relation to the content, application or service can only be determined by Government with scope for judicial adjudication in case of any dispute.

43 CHAPTER 8

TELECOM SECTOR OTT SERVICES AND IMPACT ON

“The Internet is the first thing that humanity has built that humanity doesn’t understand, the largest experiment in anarchy that we have ever had.”

— ERIC SCHMIDT

8.1 Over the Top (OTT) applications have emerged through innovation fostered by the Internet to meet latent demand for common customer products and services at a lower cost using digital connectivity. OTT service providers have become an important entity in the Internet economic eco-system.

provider offering ICT services, which neither operates a network nor leases networkThe consultation capacity paperfor service of TRAI provision. defines Clearly,OTT service OTT serviceprovider provision as a service has come to occupy an important place in the economy and is an inseparable part of the Internet world.

8.2 OTT applications are enabled by delayering of communications networks through Internet Protocols (IP) that permit the applications layer to function independent of the media layers. IP has facilitated the separation of “carriage” from “content”, which has allowed content provided by OTT service providers to be carried over the top of communication networks to directly serve end-users at the edges of the network. In OTT transactions, the network operators link the OTT service provider and end-users without being responsible for the content carried over it.

8.3 For the purposes of the present report, OTT service provision can be broadly

classified(i) OTT into communications two groups – services real-time person to person telecommunication services. These ser- – These services (e.g. VoIP) provide 44 NETChapter NEUTRALITY 8 - OTT Services - DoT Committeeand Impact Reporton Telecom - May Sector 2015

vices are similar to the telecommunication services provided by the licensed telecom service providers (TSPs) but are provided to the users as applications carried over the internet using the network in- frastructure of TSPs. Essentially OTT communications services com- pete with the services provided by TSPs riding on the infrastructure created by TSPs.

(ii) OTT application services – All other OTT services such as me- dia services (broadcasting, gaming), trade and commerce services

(Internet(e-commerce, based radio intermediary taxi, financial applications services), like cloudFacebook, services YouTube) (data offerhosting services & data to management end-users using platforms/applications), the network infrastructure social created media by TSPs but do not directly compete with the service offerings for which the TSPs have obtained a licence under the applicable law i.e. the Indian Telegraph Act, 1885.

8.4 Different types of OTT applications place different demands on network

server capacity by the OTT service provider, to render service of the desired qualityresources to thein terms end-users. of bandwidth In general, and real-time priority, applications besides requiring require sufficient a higher priority in order to ensure that packet latency and jitter are managed by the network in order to give the desired quality of service. The demands on network resources as a factor in OTT service provision requiring real- time connectivity becomes more important in case of mobile media where spectrum resources would have to be dedicated during the period of real- time connectivity by the network. Therefore, it is natural to assume that

in order to ensure that unreasonable demands on network resources are notreasonable placed bytraffic a few management real-time OTT practices applications may need to the to bedetriment adopted of by all the other TSP

8.5 traffic. was amongst the earliest OTT services to be offered. Depending upon the Amongst OTT communication services, Voice over Internet Protocol (VoIP)

legal framework, different countries view VoIP either as voice or as data and Communicationaccordingly attempt Service to regulate or as a it.Publicly Some countries Available view Telephone VoIP as Service. a voice service On the e.g. European Union, where VoIP can be classified as either an Electronic

other hand, many countries like Bolivia, Czech Republic, Egypt, Jordan and 45 Chapter 8 - OTT Services and Impact on Telecom Sector

the United States of America view VoIP as data. Initially most countries had Thebanned following VoIP services, chart drawnbut over from time the the Internationalnumber of such Telecommunications countries allowing UnionVoIP services, (ITU) report but regulating shows the such shift services, from outright has been prohibition gradually to increasing. regulated

permission in VoIP services:

(Source : GSR 2009 Discussion Paper- ITU) Graph 2: Regulation of VoIP Services

8.6 Telecom Policy of 1999 which permitted Internet Service Providers (ISPs) toIn process India, “Internet and carry Telephony” voice signals was through first permittedthe public underInternet the with National effect from April 1, 2002. The form of restricted Internet Telephony permitted in India was restricted to communications between personal computers

Public Land Mobile Network (PLMN) abroad or between devices connected to(PCs) ISP ornode between with statica PC andIP addresses. a Public Switched However, Telephone TSPs could Network provide (PSTN)/ end to

end service on VoIP as per their license. Thereby, voice communication to and from a telephone or mobile device connected to the PSTN/PLMN and 8.7 followingWith incr E.164easing numbering bandwidth was speeds specifically through prohibited technology to ISPs. development in networks and the development of smart phone devices with an operating system supporting OTT applications have enabled OTT communication

services togrew be easilywith the accessed advent over of instant data path messaging on PSTN/PLMN services includingsuch as termination on PSTN/PLMN abroad. The usage of OTT communication 46 NETChapter NEUTRALITY 8 - OTT Services - DoT Committeeand Impact Reporton Telecom - May Sector 2015

messaging services offered by TSPs to OTT services over the Internet. Along withWhatsApp instant and messaging, i-Message international leading to voice shift calling in traffic also from migrated conventional to OTT

international calls and the arbitrage available in substantially lowering the costsservice of provisioningcommunication. specifically While both on affected account revenues of high costs of TSPs, of conventional neither had the effect of completely disrupting the business revenue models of TSPs. As per quarterly data published by TRAI, the outgoing minutes of usage (MOU) per subscriber availing GSM services per month for international calls has remained static at 0.3 minutes for the last 15 months (0.13% of outgoing minutes) indicating market stabilization in so far as shift to OTT applications for international voice calls are concerned. In terms of revenue, international voice calls contribute 3.45% of the adjusted gross revenues (AGR) for the Indian telecom industry as of September 2014. It has also impacted the revenues of ILD operators. However, operators have not shown much initiative in reducing this arbitrage which has further accentuated the subscriber behavior. In the case of international voice calling, the shift

addition to lower international carriage and interconnection costs which loweredtowards payments OTT services to foreign has certainlytelecom companies. meant greater customer benefit in

8.8 However, OTT domestic voice call (local plus national) communication

three-fourthsservices have theof total potential TSP revenues. of significantly TSPs in disrupting India show existing revenue revenue realization models of of TSPs. Voice revenues (including rental revenue) contribute approximately

toaround G.729 25 codec) paise4 .per As MBper forTSP data data services. given during In the consultation, case of a voice conventional communications voice service, 1 MB of data is equivalent to 4 minutes of voice (@ 32 kbits/s according

improvementcalls have a revenue in quality realisation of service of around and related 36 paise technological per minute, whereasadvancements, a VoIP minute which is about 256 KB of data yields revenue of around 6 paise. With communication services. While it may be argued that reduced call costs may leadincreasingly to higher VoIP usage is viewedand therefore, as functionally higher revenues, equivalent the to demand conventional elasticity voice of

4

22Kbps,Conversion G.723.1 is dependent - 21 Kbps, upon G.726 the – codec 55 Kbps, used G.726 by the – 47VoIP Kbps, call. G.728 Here are- 32 approximate Kbps. Messenger values services for data like WhatsApp,consumption Skype of the use most proprietary common codecscodecs andused so for the VoIP: conversion G.711 - ratio87Kbps, will G.729 vary thereby - 32 Kbps, affecting G.723.1 the –

has been taken as a reference. minutes of voice carried in 1 MB of data. However, G.729 is one of the most popular VoIP codecs, hence it 47 Chapter 8 - OTT Services and Impact on Telecom Sector

such usage due to lower prices is yet to be conclusively and comprehensively evaluated. This pricing arbitrage of 6 times between conventional voice

domestic telecom markets. This may have the undesirable effect of decelerating thecommunications pace of telecom and infrastructure VoIP offered expansion, by OTT has whereas the potential the need of is disrupting to boost investment in telecom infrastructure to increase broadband reach, speeds, bandwidth capacity and enhanced quality of service.

8.9 The problem is further exacerbated from the regulatory angle when viewed in the context of a licensed service provision co-existing with an unregulated service both competing for the same set of customers especially when the regulated service provider rides on the network infrastructure of the licensee to deliver the service. The existence of a regulatory arbitrage in addition to the pricing arbitrage adds a degree of complexity that requires a calibrated

European Commission has made a policy pronouncement on May 6, 2015 for aresponse Digital Single to bring Market about Strategy a level forplaying Europe field. arguing, It is relevant inter alia, to thatnote there that isthe a

for players in the communications market to the extent that they provide competingneed to review services telecom and rulesalso for to lookmeeting at ways the longof ensuring term connectivity a level playing needs field of the European Union. The legal aspects of the issue have been dealt with in the Chapter on Legal, Licensing and Regulatory issues.

8.10 Innovation has been a key feature of the Internet and the emergence of OTT service provision has been an important example of such innovation. While OTT application services are a welcome development that substantially enhances consumer welfare at reduced costs, the creative disruption to existing service provision models wrought by OTT communication

inservices, India. Evidently, or more the specifically forward domesticmarch of technology VoIP, needs and greater innovation examination. cannot beThis stopped, is more but so becausepolicy-makers VoIP using have E.164the onerous numbering task hasof ensuring been prohibited that the transition is managed so as to balance various competing objectives in an adroit manner.

8.11 In view of the above discussions, the committee recommends the following :

(i) OTT application services have been traditionally available in the market for some time and such services enhance consumer welfare and increase productivity. Therefore, such services should be actively

48 NETChapter NEUTRALITY 8 - OTT Services - DoT Committeeand Impact Reporton Telecom - May Sector 2015

encouraged and any impediments in expansion and growth of OTT application services should be removed.

(ii) Specific OTT communication services dealing with messaging should not be interfered with through regulatory instruments.

(iii) In case of VoIP OTT communication services, there exists a regulatory arbitrage wherein such services also bypass the existing licensing and regulatory regime creating a non-level playing field between TSPs and OTT providers both competing for the same service provision. Public policy response requires that regulatory arbitrage does not dictate winners and losers in a competitive market for service provision.

(iv) The existence of a pricing arbitrage in VoIP OTT communication services requires a graduated and calibrated public policy response. In case of OTT VoIP international calling services, a liberal approach may be adopted. However, in case of domestic calls (local and national), communication services by TSPs and OTT communication services may be treated similarly from a regulatory angle for the present. The nature of regulatory similarity, the calibration of regulatory response and its phasing can be appropriately determined after public consultations and TRAI’s recommendations to this effect.

49 CHAPTER 9

TSPs NET NEUTRALITY & IMPACT ON

“Every threat to the status quo is an opportunity in disguise.”

— JAY SAMIT

9.1 India has made extraordinary strides in telecom sector over the last two decades but the growth has been voice-centric. While India is close to having a billion subscribers on its network (996.49 million subscribers as on March 31, 2015), it is yet to touch a broadband subscriber base of 100 million that

and internet penetration has kept a large proportion of citizens from being too at 512 kbps speed limits defined as broadband. The low broadband the revenues of the TSPs. It is in this context of a voice-centric telecom sector thirstingconnected for to investmentsthe Internet economy.to expand Voice reach, contributes speed and about capacity three-fourths that the Net of Neutrality debate has pitted TSPs against OTT service providers.

9.2 The telecom world of the future is centered on data growth. Certainly, the growth in data revenues for TSPs have indicated a robust trend in recent times signifying the country’s movement towards a data-centric telecom sector. The Performance Indicators Report published by TRAI quarterly indicates that as on December 2014, data revenues now constitute 17.1% of the Average Revenue Per User (ARPU) per month as against 6.5% as on March 2013.

9.3 Telecom networks in India still are a mix of circuit switched and IP and full transition to IP networks is yet to happen. One emerging scenario could be when all networks embrace IP and smart-phones or Internet-enabled feature phones are used by all subscribers. If the transition to this scenario happens smoothly, the business model of TSPs would also have transformed into a data-centric model where voice communications would also become one of the many applications riding on a packet switched IP network. In this

50 NET NEUTRALITYChapter - 9DoT - Net Committee Neutrality Report & Impact - May on TSPs2015

scenario, the pricing arbitrage between voice communications by TSPs and OTT service providers would be substantially reduced. Another scenario predicts that if OTT communication services are allowed unhindered, they will substantially impact the revenues and consequently TSPs ability to invest impacting the transition to IP networks as well as expansion of broadband infrastructure across the country. The key public policy imperative is to manage the transition from voice-centric to data-centric networks with the concomitant change in technology.

9.4 TSPs have argued that their cumulative investments in the telecom sector is approximately Rs 7,50,000 crores and further investments of around Rs

and5,00,000 OTT crorescommunications would be required service in providers the next five works years to to theirmeet demand.disadvantage. TSPs Thefurther pricing argue arbitrage that the is presencearound 12.5 of atimes non-level in case playing of a voice field call between and 16 timesthem

below: in case of messages as per data put together by TRAI reflected in the table Table 2 : Pricing Arbitrage (TSP Voice vs OTT Data call)

TSP voice call OTT Data call One minute call 50 paisa 4 paisa charges 25 p/MB; VoIP Long holding Average holding call 150 KB 2 minutes 12 minutes time because of time low cost TSP Message OTT message Message cost 16 paisa 1 paisa

(Source : TRAI Consultation Paper)

9.5 The Committee is of the view that the statement of TSPs that they are under

perfinancial TRAI 5 stress , the gross due to revenue the rapidly of the falling telecom voice sector revenues has increased and insufficient from Rs growth58,385.39 in datacrore revenues, as on December is not borne 2013 outto Rs by 63,954.67 evaluation crore of financial as on December data. As 2014, a growth of 9.54%. The share of data revenues in total revenues

5 Indian Telecom Service Performance Indicators Report for the quarter ending 31.12.2015, released by TRAI on 8th May 2015.

51 Chapter 9 - Net Neutrality & Impact on TSPs

has increased from 12.07% to 17.1% over the year from December 2013 to December 2014 indicating a healthy growth rate in data revenues to compensate to some extent the expected shortfall in voice revenue growth.

9.6 pipe” providers, generating new revenue streams. These aspirations have TSPs/ISPs aspire to transform from “dumb pipe” providers to “intelligent of making the pipe bigger, monetize it better and make it more intelligent to deliverlarger public more policythrough implications their own innovation. in the long However,run. TSPs/ISPs this need have not the happen option at the cost of established principles of Net Neutrality and innovations at the edge.

9.7 Substantial investments would be required in the telecom sector if the goal of broadband connectivity reaching to at least 600 million subscribers by 2020 and average speeds of at least 2 Mbps with speeds of 100 Mbps available

in technology are generally to be welcomed but the conundrum for public policyon demand and for is toGovernment be fulfilled. is Disruptive to ease the changes transition brought in public about interest by advances in case the disruptive change has the possibility of affecting the larger goals of the nation. The transition from a voice-centric business model to a data-centric model is inevitable and the attempt should not be to hold the tide back but to manage this transition.

9.8 The Committee also feels that existence of a regulatory arbitrage and a price arbitrage between TSPs services and OTT communications

Considering that broadband network in the country is still far from maturity dueservices to limited resulting penetration from a non-level and poor playing network field bandwidths, needs to be the taken possible note full of. impact on TSP voice revenues is still not clear. TSPs may become reluctant to invest in expansion of broadband infrastructure if the possibility exists of competitive OTT communication services cannibalising expected increase in revenues from such investments. The immediate imperative for Government is to facilitate investment in broadband infrastructure and bring out policy certainty in the investment climate. Consequently, ensuring a policy and

extremely important at the present juncture. regulatory level playing field in OTT domestic voice communications is 9.9 Apart from the economic argument, TSPs have also forwarded the argument

of level playing field in terms of regulatory oversight, security burden, 52 taxation, VoIP price arbitrage and OTT infrastructure localization etc. NET NEUTRALITYChapter - 9DoT - Net Committee Neutrality Report & Impact - May on TSPs2015

For OTT domestic communication services, price arbitrage and resulting substitution is the main argument advanced by TSPs for non-level playing

previous chapter. The issue of taxation is beyond the scope of the Committee, field. This issue is accordingly dealt with in preceding paragraph and in the Issues impinging on network and national security, localization of OTT infrastructurehence the Committee have been refrains dealt withfrom later making in this any report. specific recommendation.

9.10 To summarize, the Committee favours regulatory oversight on OTT communication service providers as recommended in the previous chapter. The Committee believes that for OTT application services there is no case for prescribing regulatory oversight similar to communication services.

53 CHAPTER 10

NEUTRALITY TRAFFIC MANAGEMENT & NET

“Technology is dominated by two types of people: those who understand what they do not manage, and those who manage what they do not understand.”

— ARCHIBALD PUTT

10.1 With increasing number of users on the internet, their online activities have also changed dramatically. This is leading to the IP transport networks becoming increasingly congested. Service providers i.e. both TSPs and ISPs

use the IP transport network to carry voice, video and internet traffic. To ensure that networks operate efficiently, they restrict or ration traffic on their networks, or give priority to some types of traffic over others generally during 10.2 peak periods. This is known as ‘traffic management’ or ‘traffic shaping’.

Tmanagementraffic management is that hasit is oftena way been to make opposed the consumer on Net Neutrality experience grounds more controlledas being injurious and less subject to consumers’ to the vagaries interests. of Network An alternative conditions, view especially of traffic

management allows the performance of services to be managed individually socongestion. that the most By Quality treating of different Service (QoS) types sensitive of data services traffic differently,receive the better traffic QoS from the network. In an unmanaged situation, consumers would not understand and predict the factors that affect their experience, whereas

transparency, and a better overall quality of experience for the majority of customers.in a traffic managed situation there is potentially more certainty and more

10.3 ITU has published various recommendations for differential treatment of

network traffic on transport networks and their effect on user experience, 54 NET NEUTRALITYChapter 10 - - Traffic DoT Committee Management Report & Net - MayNeutrality 2015

categorieslike the ITU-T in IMT-2000 G.1010 recommendation, mobile environment. which These defines recommendations the multimedia form QoS categories from an end user viewpoint and M.1079, which defines the and QoS control mechanisms. According to G.1010 recommendation, the key parametersthe basis for whichdefining impact realistic users QoS are classes delay, for delay underlying variation transport and information networks

loss, which need to be minimized. For this purpose various types of traffic losscan becharacteristics. classified into Therefore, 8 classes. Some the priority classes areand error QoS toleranthave to beand attributed some are not. The traffic in each class can tolerate only certain delay, jitter and packet priority to non-critical background services. Therefore, it is necessary to distinguishaccordingly the with different highest types priority and treat to voice them andaccordingly. video traffic and lowest

10.4 Mobile networks are different from normal transport networks in the sense that the capacity limitation happens due to the limited radio spectrum and not due to the core network. Hence, even if there is ample capacity in the core network, the end to end user experience will be impacted by the capacity constraints in the radio spectrum. Therefore, M.1079 recommendations, basically based on G.1010, are applicable especially to the IMT-2000 mobile networks for ensuring end to end QoS based on user experience. From a user’s perspective, performance needs to be expressed by parameters which focus on user-perceivable effects, rather than their causes within the network; are independent of the networks internal design; take into account all aspects of the service from the user’s point of view which can be objectively measured at the service access point; can be assured to a user by the service provider(s).To achieve the different QoS objectives, as applicable

experience.to packet networks, traffic management tools can be used by TSPs/ISPs to control the transmission of IP traffic to consumers for satisfactory user 10.5

As voice, video & control traffic have different characteristics, they will have especially predefined QoS parameters set in the network based on the Latency, Jitter & Packet Loss requirements for voice, video and control traffic. notWithin have ‘Internet the intelligence traffic’, generallyto identify same the type QoS of is content followed information irrespective available of the service/ content, this is because devices operating at Layer-2 or Layer-3 do and setting the appropriate QoS level can be done only by devices having at the Application Layer or above. The differentiation of the ‘Internet traffic’ 55 Chapter 10 - Traffic Management & Net Neutrality

the capability of Deep Packet Inspection (DPI) which operate at Layer-7 or above. These devices can identify the type of application in the packet by (a) Inspecting the packets application layer protocol (b) Analyzing the data

pattern inside the packet. Once the layer-7 device identifies the packet as belonging to a specific application like Skype, YouTube, http browsing etc, the device can set different QoS levels for these packets in its Layer-2/3 Accordinglabelling. This to Net Layer-2/3 Neutrality label proponents, in the packet this typeis used of differential for traffic management treatment of IPby packetsthe routers/switches is violation of whichNet Neutrality operate in principles. the core and aggregation network.

10.6 There are many methods to manage as well as audit the Service Provider’s

evolving. Some of the more popular methods are QoS (Quality of Service); DPInetwork (Deep traffic. Packet Traffic Inspection); management data methodsvolume havecaps; beensetting continuously consumer broadband connection speed etc. “QoS” and “DPI” are network management practices but “data volume caps” and “setting consumer broadband speed” are business practices. From a Net Neutrality perspective QoS and DPI are important.

10.7

The following are few categories into which the traffic management implementation(a) Differentiation may be - classified – - It is the practice of treating different types of traffic differently. E.g. TSPs VoIP traffic (SIP), TSPs VoD/IPTV service, In belongternet etc. to different Based upon classes the type with of different traffic and delay delivery and requirements,error-tolerant Service Providers may control the flow. As per ITU-T the traffic can- ently for a variety of reasons, some of which are given below– characteristics. Different types of IP traffic have to be treated differ (i) To ensure that the limited IP transport network capacity is used op- timally by all users, e.g. congestion control, in order to ensure all end users receive acceptable service.

(ii) Successful delivery of many time-sensitive services (such as re- -

Loss.al-time IPTV, video conferencing, VoIP etc., and control traffic there of by addressing QoS based concerns on the Latency, Jitter & Packet

56 NET NEUTRALITYChapter 10 - - Traffic DoT Committee Management Report & Net - MayNeutrality 2015

(iii) Emergency services.

(iv) Guaranteed services to enterprises based on commercial agreements

and SLAs, e.g. VPN traffic. blocking of sites) implemented based on the advice of the security (v) Subjectagencies Internet or court Trafficorder. to certain policies (dropping of packets /

(b) Maintain the Security and integrity of network consists of undesirable elements like viruses, worms, spam, DOS (De- nial of Service) attack etc. Therefore, it becomes – important Internet traffic to protect also Since this is a legitimate requirement for maintaining the health of the network, it is notthe considerednetwork elements as violation from of suchNet Neutrality. undesirable traffic.

(c) Congestion control

– With the IP traffic ever increasing by leaps and ISPsbounds, resort it hasto some become kind difficult of congestion for the control ISPs to during constantly peak upgradeperiods the network for handling the increasing traffic. Therefore, almost all This type of control can be either application-agnostic (i.e. treat all to ensure that the network doesn’t collapse under the traffic load. the time sensitive applications and performing congestion control onIP traffictime insensitive in the same applications). manner) or application-specific (e.g. sparing

Application-agnostic congestion control being a legitimate re- quirement cannot be considered to be against Net Neutrality. However application-specific control within the “Internet traffic” class may be against the principles of Net Neutrality.

(d) Packet prioritization/de-prioritization - Wherever queues occur

wholein a network, without higher discrimination, priority traffic may be such delayed as TSPs or suffer SIP VoIP packet will loss. get Thisthrough is typically whereas applied lower prioritytoday in trafficthe core such and as aggregation Internet traffic, network, as a but may in future migrate closer to the access network, when the ag-

- imizegregation network network utilization moves andcloser to minimizeto the end the user effect in a onflat users. IP network in order to increase the effectiveness of traffic management, to max

57 Chapter 10 - Traffic Management & Net Neutrality

10.8

TSPs/ISPs may not always treat the network traffic in neutral ways. The thenabove have mentioned implications traffic for management Net Neutrality methods and so could need alsoto be be regulated. used to derive some undue advantage without reasonable justification. Such practices will

10.8.1 applications, Illegitimate trafficcontent management and services, techniques thus harming could both lead tocompetition discrimination and by fixed or mobile TSPs/ISPs with market power in favour of their own

consumers. For example VoIP services provided by ISPs are in direct alsocompetition functioning to voiceas ISPs, telephony they may have services a tendency provided to block by traditional or slow down fixed the / mobile operators. Therefore, when traditional fixed / mobile operators are

VoIP traffic of competing ISPs.

10.8.2 on When exclusive TSP/ISPs arrangements, start blocking/throttling the incentive to develop of competing new and applications/ innovative applicationsservices from and different services content by the providers, other content or prioritize providers certain goes trafficdown. basedStart-

that major companies enjoy, start-ups might not be able to afford the fees necessaryups will have to adeliver difficult content time to to establish customers. their Telecommunication business. Without the companies cash flow can pick their preferred partners, subsidize the data costs for their apps, and make it much harder for new entrants to compete with the incumbents. This will be detrimental to innovation.

10.8.3 Discrimination may lead to degradation of quality of service. Mainly two types of degradation of quality of service may occur (i) Internet access service as a whole - (e.g. caused by congestion on a regular basis). This

happens because, when traffic is throttled / blocked by the TSP/ISPs, there is a ripple effect on the routers where traffic starts piling up as the IP packets P2Pare not applications cleared as (e.g. fast video as they call areon Instant arriving. Messenger) This leads services to artificial get degraded network incongestion. quality because (ii) Individual they are applications very time sensitive. - VoIP, VoD and sometimes sensitive

example blocking of tethering applications on mobiles as done by some 10.8.4 operators Unreasonable in other traffic countries. management Tethering also application puts users allows at disadvantage. the customer For to use the data connection to run Internet applications on another device, such as a laptop. Clearly, this allows many more opportunities to use innovative

58 NET NEUTRALITYChapter 10 - - Traffic DoT Committee Management Report & Net - MayNeutrality 2015

services on a phone. The main reason for constraining devices from ‘tethering’ is simply to extract more payments via a second contract. Yet a customer has paid for a certain amount of data within fair use limits already. There seems to be little reason to block the use of such applications, except to exploit the

through the device and its contract, rather than through packet management, thisclosed is considereddevice to maximize a ‘Net Neutrality’ payments. issue, While as the the means network of managing operator trafficis using is

network. traffic management techniques to create unreasonable management of their 10.9 In view of the above, it becomes very important to make transparent

disclosure to the users, of traffic management practices adopted by the aTSPs/ISPs. mechanism However, to address these the disclosures concerns ofcan the be users. very difficultFor example, to understand it can be and further even to detect misuse of traffic management, unless there is service is attributable to: difficult to determine whether any degradation in the quality of a broadband

ISP such as ‘bandwidth throttling’ - the use of a traffic management technique by a network operator or - the selective blocking or delay of IP packets linked to a particular

- theservice preferential e.g. torrent allocation traffic, P2P of atraffic households broadband connection

- somespeed otherto specific unrelated services factor and/or such as congestion in the core IP net- work or poor quality of the internet last mile connection or too many users trying to access the same service from a limited capacity inter- net server.

10.10 to the users about their intervention practices to maintain transparency and Nevertheless, TSPs/ISPs should be mandated to make adequate disclosures government to lay down rules for disclosure and also for what practices can allow users to make informed choices. It is also necessary for the regulator / suitable grievance redressal mechanism is also required to be put in place. be allowed/disallowed, keeping in view the principles of Net Neutrality. A 10.11

Due to variety of traffic on the IP transport network, the concept of one size fits all does not work and differentiation becomes an essential function 59 Chapter 10 - Traffic Management & Net Neutrality

tools as compromising the openness of the internet. There is a delicate balancefor network between management. ensuring Butthe manyopenness consider of the the Internet use of andtraffic reasonable management and

To draw a line between these two objectives is challenging and is the crux ofresponsible the matter use surrounding of traffic management the Net Neutrality by TSPs/ISPs debate. Duefor legitimateto many reasons, needs.

and some can be avoided not being in tune with Net Neutrality principles. Operatorsnetwork operators may be prohibited differentiate from and practices manage consideredthe traffic. Someas contrary are essential to Net Neutrality principles.

10.12 The Committee recommends that legitimate traffic management practices may be allowed but should be “tested” against the core principles of Net Neutrality. General criteria against which these practices can be tested are as follows:

(i) TSPs/ISPs should make adequate disclosures to the users about their traffic management policies, tools and intervention practices to maintain transparency and allow users to make informed choices.

(ii) Unreasonable traffic management, which is exploitative or anti- competitive in nature, may not be permitted.

(iii) In general, for legitimate network management, application- agnostic control may be used. However, application-specific control within the “Internet traffic” class may not be permitted.

(iv) Traffic management practices like DPI should not be used for unlawful access to the type and contents of an application in an IP packet.

(v) Improper (paid or otherwise) prioritization may not be permitted.

(vi) Traffic management is complex and specialized field and enough capacity building needs to be done before undertaking such an exercise. Mechanism to minimize frivolous complaints will be desirable.

60 NET NEUTRALITY - DoT Committee Report - May 2015

CHAPTER 11

CONTENT DELIVERY, INTERCONNECTION & MANAGED“Content is King” SERVICES — BILL GATES

11.1 The traditional forms of content provision are facing profound structural change. Traditional forms of content delivery, such as free-to-view television and newspapers, are coming under increasing pressure partly as a result of emerging competition from the online delivery platforms. Advertisement revenues on which revenue models of traditional content delivery were based are split with the new delivery platforms over the Internet. With increasing penetration of the internet and broadband, there is a tendency among all content providers to deliver every type of content through the internet.

11.2 In the future, it is expected that content aggregators will deliver content directly to the user device (set-top-box, computer, television or smart phone) through a broadband connection. Content aggregators would aggregate content providers and tie up the delivery mechanism, creating a new value chain. As the range of devices able to support over-the-top delivery proliferates, new business models

to access content through multiple devices from anywhere on the internet. develop and competition intensifies, it is possible that consumers will be able inevitably consume considerable internet bandwidth. This will lead to high data Such services, particularly television, if delivered in high definition format, will network capacity. This approach of putting all possible content on the Internet isusages leading and to higher congestion revenues on thefor theInternet. TSPs/ISPs Realising provided this, theycontent have providers the required are devising new techniques to improve the user experience, and some of these new techniques may have implications on Net Neutrality.

61 Chapter 11 - Content Delivery, Interconnection & Managed Services

11.3 their retail customers but generally leave the content providers free. Content TSPs/ISPs link the content provider to the user on the Internet. They charge supplement revenues from retail customers. If this business model proliferates, providers offer possibilities for new revenue streams for TSPs/ISPs to

then TSPs/ISPs no longer retain an incentive to remain neutral in the market 11.4 Manfor contenty online constituting service providers a possible now conflict use Content and impacting Distribution Net Neutrality.Network (CDN) to distribute content over the network. CDNs help to move content to the edge of the internet and closer to the user, normally using an overlay network, before being offered for internet access, to prevent the quality of the services

request content, it can then be delivered from a local server operated by thebeing CDN impacted provider, by rather traffic than congestion a remote in internet the internet server core. which When would consumers require the content to be delivered over the internet core. There are a number of third party CDN providers such as Akamai, EdgeCast, Google, Yahoo etc. who have built their own CDNs to deliver their content faster to the end-user. Another trend has been for some ISPs to provide their own CDN solutions to other service providers wanting to avoid congestion in the internet delivery chain as well as the internet core. To improve the user experience further, CDN providers are also directly peering with large ISPs through mutual agreements. However, the views regarding these arrangements differ across the pale of the Net Neutrality debate.

11.5 Net Neutrality proponents argue that such peering arrangements give preference

as equivalent to paid prioritization. Smaller content providers who cannot afford to thehave traffic such ofarrangements certain large are content discriminated providers against over others, and their which content is considered reaches comparatively slowly to the end user impacting user experience. Another view is that these CDN servers are serving all customers of the service provider uniformly and enhance the user experience without any discrimination.

11.6 The Committee is of the opinion that CDN is an arrangement for management of content as a business strategy. Making available one provider’s CDN to others on commercial terms is a normal business activity. Discrimination in access or adoption of anti-competitive practices by them is best left to be covered under the law related to unfair trade practices.

62 Chapter 11NET - Content NEUTRALITY Delivery, -Interconnection DoT Committee & ReportManaged - May Services 2015

11.7 Managed Services, also known as specialized services, are tailor-made services provided to enterprises or big business concerns for increasing business productivity. Managed Services may include bouquet of services

internet services. An enterprise’s business may rely on this ICT backbone, spreadin the areaacross of its telephony, business domestic/internationaloperations geographically. data connectivity, video,

11.8 According to TSPs, enterprise services are different from public internet services. Enterprise services are customised to the requirements of businesses and are Service Level Agreement based, one-to-one commercial arrangements between the TSP and Enterprise. These are in the nature of private networks rather than public communications and therefore, do not impinge on Net Neutrality. The opposite viewpoint warns that managed services might be a mask to circumvent Net Neutrality principles, giving TSPs

arounda platform the on managed which they services are better plan, placed to circumvent to bargain the with non- specific discriminatory high value rulescustomers. of Net AnotherNeutrality. argument is that the TSPs/ISPs may design services

11.9 Since the managed services and public Internet share the same telecom resources at different points in the network, therefore, issues of inter se priority

enterprise-related services, gets the highest priority of QoS along with voice andin traffic video. emanating This may from be allowed the two withoutwould arise. affecting Managed the minimumservices, perceived guaranteed as The Committee is of the considered view that managed services are a necessary requirement for businesses QoS of “Best Efforts public Internet”. and enterprises, and suitable exceptions may be made for treatment of such services in the Net Neutrality context.

11.10 While locating information on the Internet, search engines are important

published information to be easily found. Information that cannot be found onas userthe Internet tools of is finding in principle information, non-existent for locating to the potential digital addressuser. A website, and for which is not listed by a search engine, cannot be found unless the user

well as potential barriers to information retrieval on the Internet. Search enginesknows the on specific the Internet address function of the site. on Thus,commercial search enginesterms and work conditions, as aids as

search engines to erase or blur digital existence on the Internet cannot be overlooked,at times transparently if such ability revealed transfers and control at times over confidential. information The available ability on of

63 Chapter 11 - Content Delivery, Interconnection & Managed Services

the Internet to a few. This adds another dimension to Net Neutrality, viz. “search neutrality”, which is a principle that search engines should have no editorial policies other than that their results be comprehensive, impartial and based solely on relevance. The market concentration of the search engines space has also the ability to distort the freedoms and user rights on the Internet. The ruling of the European Commission in May 2014 can be noted in this context, which based on its 1995 Data Protection Directive held that its Directive applied to search engines too and gave the right of users of the Internet to seek removal of personal information in digital space by search engines and social media platforms. This Committee refrains from making any specific recommendation on search neutrality, but flags this issue as a concern for public discussion.

11.11 As the internet is evolving and more players are entering into it, organizations are competing as to who will control the customer relationships. Firms are also competing for a share of advertising revenues and consumers’ expenditure. Content providers are experimenting with technologies like Digital Rights Management (DRM) as a means by which they can establish greater control over how their content is accessed, consumed, stored and shared by end users. On the other hand network operators are using DPI

control what the user can access or cannot access, probably violating the Nettechniques Neutrality to requirement. manage the flow of traffic across their networks, again to

11.12 As the value chain is taking shape, network operators and content providers are bargaining over how future rents will be divided and technical measures such as DPI and DRM are being deployed to strengthen relative negotiating positions. Advance technologies enable the collection of data, both on the effective demand for particular pieces of content and on how particular consumers engage with the content. The data generated is in itself extremely valuable, which can be sold to third parties as well as being used to target advertisements or services based on user behaviour. Control of that data

content providers is so intense. is one reason why the competition between ISPs/network operators and 11.13 protection against the leakage and misuse of such data by them. However, content Since theproviders ISPs/TSPs are largely are regulated unregulated by Indian and especially laws, there those is who reasonable are not based in India. Response to this issue will have to await a comprehensive law on privacy and data protection in the digital and physical space.

64 NET NEUTRALITY - DoT Committee Report - May 2015

CHAPTER 12

TARIFFS“Nothing is cheap & which NET is superfluous, NEUTRALITY for what one does not need, is dear at a penny”

— PLUTARCH

12.1 The communications sector has evolved from monopoly service provision to a competitive market structure. The presence of competition has permitted

customertariff fixation choice for in telecom service service plans with provision related to tariffs move and from rates regulator depending fixed ontariffs market to regulatory forces. Innovative forbearance tariff givinghave allowed TSPs/ISPs service the differentiation liberty to provide and customer choice in planning usage. The mobile revolution was greatly aided

society with limited usage co-existing with post-paid tariff plans that were aimedby specific at the pre-paid richer tariffsections offerings of society that cateredwith high to usage.the poorest With sectionsincreasing of costs of service and greater pressure on bottomlines, TSPs and ISPs have resorted to creating tariff plans that charges for usage based on the content or applications sourced by the user. Differential data tariff plans linked to type of usage and zero rating plans are a few such examples. These actions in tweaking tariff plans disturb user choice and market provision which has serious implications on Net Neutrality.

12.2 Under section 11(1)(c) of the Telecom Regulatory Authority of India (TRAI) Act, 1997, determining tariff is a function performed by TRAI and lies within its jurisdictional domain. As of now, TRAI follows a policy of forbearance for telecommunication services where competition exists subject to the condition that all tariff plans need to be reported to TRAI. TRAI examines the tariff plans and may intervene if they breach any of TRAI’s regulations.

ISPs from the view-point of Net Neutrality principles. In case Net Neutrality principlesHowever, TRAIare clearly does notlaid presentlydown by law examine or through the tariff licensing plans conditions, filed by TSPs/ then

tariff plans filed before TRAI would need to be tested on the corner-stone 65 Chapter 12 - Tariffs & Net Neutrality

principles of Net Neutrality to check if the plans do not violate the principles. If the tariff plans violate Net Neutrality principles then TRAI has the powers vested in it under the TRAI Act to disallow the tariff plan. Therefore, the Committee recommends that tariff plans offered by TSPs/ISPs must conform to the principles of Net Neutrality set forth in guidelines issued by the Government as Licensor. TRAI may examine the tariff filings made by TSPs/ISPs to determine whether the tariff plan conforms to the principles of Net Neutrality.

12.3 or meet some contractual obligations. For example, ISPs provide unlimited ISPs sometimes resort to traffic control to achieve some business objectives

afterdata planshe exhausts with FUP a certain(Fair Usage data Policy).volume Herelimit. the They traffic may from also the set customerdifferent broadbandis throttled speed / blocked to subscribers depending based upon upon his the subscription data pack they plans have and chosen. usage Such practices as mentioned above are widely accepted business practices and hence are not considered as violation of Net Neutrality.

12.4 A “walled garden” refers to a “closed platform” or “closed ecosystem” where the carrier or service provider has control over applications, content, and media, and restricts convenient access to non-approved applications or content. This is in contrast to an “open platform” where consumers have unrestricted access to applications, content, and much more. Such “Walled

makeGardens” mutual can agreements also be created with with content ISP/content providers, provider either on initiated exclusive offers, or non-exclusivee.g. zero rating basis, packages. to offer Zero content Rate freepackages of cost are to theoffers end where user. From TSPs/ISPs a Net Neutrality perspective, when such an arrangement is exclusive in nature, where others are excluded, then they are in effect creating a walled garden where only the mutually agreed content will reach the user and the user may have no access to other’s content. Therefore, such exclusive arrangements are generally viewed as anti-competitive and violating Net Neutrality principles which should be discouraged. However, it may be mentioned here that not all zero rating plans are controversial or against the Net Neutrality

12.5 principles.The Committee Free wi-fihas orclosely free internet looked couponsinto zero are rating some planssuch examples. suggested by some TSPs recently. Zero rating is also called “toll-free” or “sponsored” communications. It is the practice of network operators to not charge end

66 NET NEUTRALITY - DoTChapter Committee 12 - Tariffs Report & Net - MayNeutrality 2015

WhatsAppcustomers packs for a etc. defined According volume to them of data such offered plans help by specific to increase applications internet penetration.or internet services “Zero rating” in limited plans or have metered raised dataconcerns plans as e.g. shown free by Facebook/ some of the arguments in favour and against given below – a. Net Neutrality advocates believe that tariff plans that discriminate based on the content or applications accessed breach the principle of Net Neutrality that the network operator cannot discriminate be- tween content sent, received or accessed by the user. Exempting se- lected sites and applications from data caps in pricing was alleged to be anti-competitive interfering with consumer’s choice. Zero rat- ing heavily favours sites, services and applications having the ability

entering into commercial tie-ups with companies that have a small marketto strike share deals or with eye-ball. TSPs/ISPs, Such practiceswhich may constitute not have anany entry incentive barrier in to small start-ups in a competitive market for applications and ser- vices. b. The contrary opinion of TSPs is that some zero rating plans increase consumer welfare by fashioning discounted tariff plans based on what limited number of applications customers want to access e.g.

to data plans at a discounted price for chosen applications instead of theonly full Facebook/WhatsApp data plan which cost packs. at the In same such ratecases, for customers access to thesubscribe whole internet. In zero rating plans, the content providers and TSPs save on marketing and distribution costs by collaborating with each other and create producer surplus whereas users can choose the content they would like to access and pay lower charges creating consumer surplus. Therefore, TSPs argue that “zero rating” plans are mutually c. TSPbeneficials have andalso an argued acceptable that cost business of data practice. is not the primary deciding factor for choice of applications in e-commerce businesses. The cost of products sold on e-commerce sites and the user experience are the principal factors that determine consumer choice of application

to achieve economies of scale and eliminate physical stores and inventoriesproviders. Such that goe-commerce along with firmsit. TSPs adopt further the argue Internet that as “zero a medium rating”

67 Chapter 12 - Tariffs & Net Neutrality

content providers generally don’t have established infrastructure to dealplans with are end also users used on for an individual promotion basis. of new The marketing, content/services. distribution New and billing platforms of network operators can be utilised by these providers and the charges for these services built into a composite amount where the content provider pays the network operator and offers content free to the customers. Such arrangements help the smaller content providers to market their content and compete with established providers in the broader internet ecosystem.

d. TSPs draw a parallel with toll free services in traditional telecommunications as an accepted business practice for a while. Toll free services were popular because customers were able to call the

by reaching customers and offering better services. Similarly zero ratingcompanies plans without allow the being data charged charge tofor be the paid call. by Companies the content benefitted provider rather than the consumer analogous to toll free calls.

12.6 The Committee, after consideration of all opinions expressed by Net Neutrality proponents and network operators, feels that there are multitude of possibilities in designing tariff plans and it would not be possible to either pre-think all possibilities or determine its validity with respect to Net Neutrality principles. The Committee is of the opinion that a conclusion

to be seen in the context of the design of the tariff plan and the outcomes it generated,on whether including the tariff its plans ability specifically to distort breachconsumer Net markets. Neutrality Therefore, would have the Committee proposes that tariff plans (including zero rating plans) be dealt in following ways-

(i) Ex-ante determination

period prior to the launch – Before of the a plan.licensee TRAI launches would anyexamine tariff plan,each the same would need to be filed before TRAI within a reasonable Neutrality principles and that it is not anti-competitive by distorting such tariff filing carefully to see if conforms to the principles of Net deemed approval clause, if the regulator does not decide within a reasonableconsumer markets.period. This Such would a filingensure requirement balance of interests would protecting include a

principlesthe liberty of of Net TSPs/ISPs Neutrality to are design not breached. specific tariff plans attuned to specific customer demands and at the same time ensure that the 68 NET NEUTRALITY - DoTChapter Committee 12 - Tariffs Report & Net - MayNeutrality 2015

(ii) Ex-post regulation - Complaints on tariff plans may be dealt with on

by the regulator and after giving a reasonable opportunity of being a case by case basis through an adjudicatory process to be specified considered if the principles of Net Neutrality are violated. However, heard. Imposition of penalties or financial disincentives could be tariff plans impinge on Net Neutrality principles. the measurement principles are to be defined to gauge whether the 12.7 The Committee felt the need to discuss the issue of “Internet.org” and determine whether similar mechanisms disturb Net Neutrality. Internet. org is a partnership between Facebook and few companies (Samsung, Ericsson, MediaTek, Opera Software, Reliance and Qualcomm) that plans to bring affordable access of selected Internet services to less developed countries by development of new business models around the provision of Internet access. It has been criticized for violating Net Neutrality principles and favouring Facebook’s own services over its rivals. In India, it provides restricted Internet access to subscribers of one TSP. Until April 2015, Internet. org users could have free access for only a few websites, and Facebook’s role as gatekeeper in determining what websites were in that list was seen as violating Net Neutrality. In early May 2015, due to severe criticism, Facebook announced that the platform would be opened to websites that met its criteria. Participating websites have been asked to meet three criteria:

(i) Explore the entire internet so as to give users a taste of the public Internet and therefore help them see its value;

allow free access to the websites; and (ii) Efficiency of data use so that it would be economical for carriers to

of devices including smartphones and less sophisticated mobile (iii) Tdevices.echnical specifications optimized for browsing on a wide range

12.8 Content service providers have become very evolved and complex over time. They have devised new ways to reach the customer to give a better experience while accessing the content. At the same time large organizations with market power have started creating closed ecosystems which protect their business model in the long run. Also new business models are being devised by large organizations to increase their user base, but unfortunately some of these initiatives are considered non-competitive, restrictive and in

69 Chapter 12 - Tariffs & Net Neutrality

the market for content provision indicates that clear market leaders emerge inconflict a short-while with Net and Neutrality if such principles.market leaders The Committeeare able to wasdictate conscious the path that to

user view-point can be compromised leading to distortions emerging in the contentspecific provision content, thenmarket the and principles consequent of non-discriminatoryimplications for the larger access Internet from a economy and emergence of new innovations. The Committee, therefore, is of the firm opinion that content and application providers cannot be permitted to act as gatekeepers and use network operations to extract value, even if it is for an ostensible public purpose. Collaborations between TSPs and content providers that enable such gatekeeping role to be played by any entity should be actively discouraged. If need be, Government and the regulator may step in to restore balance to ensure that the internet continues to remain an open and neutral platform for expression

provider, having the potential or exercising the ability to determine user and innovation with no TSP/ISP, or for that matter any content or application based on either market dominance or gatekeeping roles. choice, distort consumer markets or significantly controlling preferences

70 NET NEUTRALITY - DoT Committee Report - May 2015

CHAPTER 13

REGULATORY ISSUES LEGAL, LICENSING &

“Laws should be like clothes. They should be made to fit the people they are meant to serve”

— CLARENCE DARROW

13.1 The telecommunications sector in India is regulated through a combination of legislations and licensing conditions. The Indian Telegraph Act, 1885, the Indian Wireless Telegraphy Act, 1933, and the Telecom Regulatory Authority of India (TRAI) Act, 1997 and subordinate legislation enacted thereunder invest the Central Government with licensing powers and provide the regulatory framework for the telecommunications sector. Licenses granted under section 4 of the Indian Telegraph Act, 1885, stipulate the terms and conditions circumscribing network operations and provision of services by telecommunication service providers. Content regulation follows ex post enforcement mechanisms with offences and punishments prescribed under the Information Technology (IT) Act, 2000.

13.2

areAs peralso applicable permitted guidelines,to provide TSPs/Internet ISPs Telephony, are allowed through to provide use of personal Internet computersaccess through (PCs) useor IP of based any customer device/technology/methodology. premises equipment (CPE) TSPs/ISPs through public Internet connecting the following:

a. PC to PC; within or outside India;

b. PC/a device/adapter conforming to standard of international agencies in India to PSTN/PLMN abroad; -

c. Any device/adapter conforming to standards of international agen

71 Chapter 13 - Legal, Licensing & Regulatory Issues

adapter within or outside India; cies connected to ISP node with static IP address to similar device/ 13.3 The guidelines also provide that Internet Telephony is a different service in its scope, nature and kind from real time voice as offered by other licensed

Operatoroperators (NLDO), like Basic International Service Operator Long (BSO), Distance Cellular Operator Mobile (ILDO) Service and Operator Public Mobile(CMSO), Radio Unified Trunk Access Service Service (PMRTS). Licence (UASL), National Long Distance

13.4 The existing instructions require application service providers, termed as Other Service Providers (OSPs), using telecom resources6 or establishing an OSP Centre7 in India to register with the licensing authority. With the growing opportunities in digital applications and services delivery including the emerging world of the Internet of Things (IoT), the importance of the OSP using telecommunications networks to provide applications and services is expected to become important. Although registration requirements exist for OSPs, practically such registration has worked as a voluntary instrument rather than an enforced mandate.

13.5

Doesof this Net framework Neutrality is basedas a concept on more find than any a centuryguidance old from Act, our the presentprovisions legal in framework? Telecom legal framework in India is unique. Although foundation have been ingeniously used to manage the regulatory changes brought aboutAct, especially by advancements the definition in communications of “telegraph” and and “power networking to license technologies telegraph” so far. For this purpose, rules and a large body of licensing terms and conditions have been created. In relation to Net Neutrality, the only relevant reference is available in the scope of Internet Service license and the Internet Services

of Internet services shall have unrestricted access to all content available onauthorization Internet except under for Unified such content License which which is stipulates restricted that by the the Licensor subscriber or designated authority under law. This provision does not enable a mechanism

enforcement methods. Since amendment to licensing terms and conditions for prescribing the principles and rules of Net Neutrality and define the 6 ‘Telecom Resource’ means Telecom facilities used by the OSP including, but not limited to Public Switched Telecom Network (PSTN), Public Land Mobile Network (PLMN), Integrated Services Digital Network

licence under Indian Telegraph Act, 1885. 7 ‘OSP(ISDN) Centre’ and/or means the the telecom infrastructure bandwidth at provideda location byin India authorized used by telecom the OSP service for providing provider the having Application valid Services.

72 NET NEUTRALITYChapter 13 - Legal,- DoT CommitteeLicensing & Report Regulatory - May Issues 2015

follow a simple process, it is possible to build an enabling clause in the licence conditions through which the Government can acquire the ability to specify enforceable guidelines for prescribing the principles and rules of Net Neutrality. This can be an immediate solution to a vexed problem without recourse to the enactment of a new law in the short term.

13.6 The Committee, therefore, recommends the incorporation of a clause in the license conditions of TSP/ISPs that will require the licensee to adhere to the principles and conditions of Net Neutrality specified by guidelines issued by the licensor from time to time. The guidelines can describe the principles and conditions of Net Neutrality in detail and provide applicable criteria to test any violation of the principles of Net Neutrality. Suggested guidelines are given in Annexure IV.

13.7 A key issue that has emerged in the debate regarding Net Neutrality is the treatment of OTT service providers who offer services similar to traditional telecommunication services. The Indian Telegraph Act grants exclusive privilege to the Central Government for the establishment, maintenance and working telegraphs. The Act empowers the Central Government to grant a licence to exercise the privilege of establishment, maintenance and working

mean any appliance, instrument, material or apparatus for transmission or receptiontelegraphs. of The voice, word electronic “telegraph” data, isexchange defined ofin messages, section 3(1AA) photos, of and the videosAct to through optical media, wires, electromagnetic emissions or radio waves. A view arising from legal considerations is that all OTT services fall under the ambit of Indian Telegraph Act and require a license to be granted for service provision. It may be recalled that in the initial days of the Internet era, operation of electronic mail services required a licence to be issued by the Central Government. The need for a licence for such public e-mail services was dispensed with later and migrated to Internet Service License. The Committee feels that there should be a separation of the “application layer” and “network layer” as application services are delivered over a licensed network. Further, OTT application services are not similar to licensed communication services thereby precluding the possibility of regulatory arbitrage arising from competition between licensed service providers and OTT application service providers. As has been discussed in detail in the Chapter on OTT Services and Impact on Telecom Sector, a distinction from the economic angle and from the existence of regulatory arbitrage can be considered in so far as

73 Chapter 13 - Legal, Licensing & Regulatory Issues

exclusive OTT international voice communications, OTT chat and OTT messaging services are concerned. In a sense, where regulatory intervention is not required, the need to subject the service provision to licensing requirements can be dispensed with on the same basis as that for OTT applications services. On the limited aspect of domestic OTT communication services, where the regulatory arbitrage arising from similar services being provided by such service providers in competition with licensed telecom service providers and this arbitrage is a matter of serious concern for policy makers, the Committee reiterates its view that domestic OTT communication services should be regulated through exercise of licensing powers available under section 4 of the Indian Telegraph Act to ensure a level playing field.

13.8 The Committee also recognises that the extant provisions in the Indian Telegraph Act, 1885 may not be adequate to deal with the advancements in communications technology and developments in communications services in recent years. The communications sector continues to experience remarkable changes fuelled by innovations in technology and service

to data, broadcast and video. It is now possible to provide communication servicesdelivery. using Communication Internet Protocol is no longer(IP) based confined devices to voice,and such nor transactions is it limited are different from the services provided by traditional circuit switched networks. The ever-expanding digital world touches nearly all aspects of our modern lives. The applications market has emerged as a vibrant component of the communications sector beyond the pale of traditionally regulated telecommunications. The applications market now leads the way into new communications behaviours, opening the door to new business models and

changed the way people communicate by giving the consumer an active role alonga redefinition with a multitude of the role of of choice. the consumer. Further, The the digitalemergency ecosystem of an arrayhas radically of new smart and connected devices, including wearable devices such as watches, glasses and health bracelets, has allowed consumers continuous connectivity. New devices connecting machines-to-machines, the “Internet of things”, are also on the anvil. In the times to come, access to online services would become vital for socio-economic existence. Therefore, in a fast-changing, constantly evolving and dynamic sector, new regulatory paradigms have to emerge to facilitate innovation and growth.

74 NET NEUTRALITYChapter 13 - Legal,- DoT CommitteeLicensing & Report Regulatory - May Issues 2015

13.9 The world has moved towards convergence of all forms of communication with a trend towards fragmentation of the value chain in the communications sector. Networks, services, applications and devices have all grown in diverse ways and have evolved into separate markets. Presently, networks and services are linked together and licensing was done in a composite manner for both. With the growth of OTT applications, the line between licensed telecom services and unregulated applications area has become blurred. With technological development, the communications sector has evolved from natural monopoly to a competitive sector. Multitude of devices for connectivity has emerged where issues of inter-operable standards have arisen. The regulatory framework has to embrace the fast-changing trends

architectureand be suitably to structuredkeep pace so with as to the flexibly technological adjust to thedevelopments requirements that of explicitlyan evolving protects communications Net Neutrality sector. but retainsThere isthe a abilityneed to of definethe State a new to ensure legal national security, maintain public order, safeguard privacy and protect data. Accordingly, the Committee recommends that a new legislation when planned for replacing the existing legal framework must also incorporate principles of Net Neutrality. Till such time as an appropriate legal framework is enacted, interim provisions enforceable through licensing conditions as suggested by the Committee may be the way forward.

75 CHAPTER 14

SECURITY“If you think technology & can PRIVACY solve your security problems, ISSUES then you don’t understand the problems and you don’t understand the technology.”

— BRUCE SCHNEIER

14.1 The security and integrity of communications networks is of immense importance to the nation’s economic infrastructure, strategic interests and social order. Therefore, the security of networks cannot be allowed to be compromised in any manner. Public policy objectives such as national security, public order, decency and morality, protection of privacy, data protection, public safety and disaster communications call for a measure of regulatory action on communications service providers. Law enforcement agencies and national security agencies need to be provided access to

protect larger public interest. communications networks and data regarding communications flow to 14.2 The powers to lawfully intercept and monitor communications are derived from section 5 of the Indian Telegraph Act, 1885. Such powers can be invoked on occurrence of any public emergency or in the interest of public safety in the interests of the sovereignty and integrity of the nation, the security of State, friendly relations with foreign States, public order or for preventing incitement to the commission of an offence. Rule 419A of the Indian Telegraph Rules, 1951, lay down the procedural requirements for lawful interception and monitoring. The Indian Telegraph Act, 1885, also affords protection to users of telecommunication services from unlawful or unauthorised interception.

14.3 The Central Government or any State Government has the powers to intercept, monitor, or decrypt any information available in any computer

isresource drawn underfrom the section Information 69 and sectionTechnology 69B (Procedureof the Information and Safeguards Technology for Act, 2000. The rules for lawful interception and monitoring of Internet traffic 76 NET NEUTRALITYChapter - DoT Committee 14 - Security Report & Privacy - May Issues 2015

Interception, Monitoring and Decryption of Information) Rules, 2009 (the Interception Rules), Information Technology (Procedure and Safeguards

for Monitoring and Collecting Traffic Data or Information) Rules, 2009 (the 14.4 ‘TrafficThe terms Data and Rules’). conditions of the license granted to telecom and internet service providers forms the next layer of the legal framework for national

under the terms and conditions of the license are that the network and networksecurity considerationsrelated elements and forprotection service ofprovision privacy. Significantbe located requirementswithin India

over the network. Additionally the service providers are expected to retain callbesides data defining records the (CDR) use of and encryption IP data keys records by subscribers (IPDR) to forbe trafficproduced carried to

protection of national security. Similar conditions are imposed by countries world-wideauthorised officers and such acting conditions in aid of have investigation proved to ofbe offences, extremely public valuable order in and the context of protection of life and property, investigation of criminal offences and preservation of national security.

14.5 New application services that supplant traditional communication services (voice, instant messaging) or provide intermediation services over the Internet (social media, video sharing) have emerged that transfer the

constitutionally governed, democratically established and accountable governmentsability to lawfully to private intercept companies traffic providing moving oversuch networksservices. This away aspect from

The providers of these application services use advanced encryption technologieshas become that a significant impedes law concern enforcement for Governments agencies in lawful across interception the world. and monitoring. Such application providers are also not amenable to national legal jurisdictions. This has thrown up new challenges for law enforcement agencies and Governments. Undoubtedly, law enforcement agencies’ access to information and records from telecommunication service providers has been of immense importance in investigation of crimes and offences and preservation of national security. Loss of this ability has the possibility of compromising national security and law enforcement capabilities. While these challenges have a peripheral bearing on the issue of Net Neutrality, nevertheless given the extreme impact that unthinking action may have, there is a need to deeply consider co-ordinated international and national

77 Chapter 14 - Security & Privacy Issues

measures to address these challenges.

14.6 The existing law affords protection to the subscriber from unlawful interception as well as unlawful access to data and information. These provisions act to safeguard privacy and ensure data protection. However, this ability stands affected with the advent of application providers where the data and information reside outside national jurisdiction. New business models have emerged where the service is provided free to the user, but the information generated out of the usage of service can be monetised without

consent (e.g. the Snowden saga). The only instrument available is reliance onthe the specific statement knowledge of the applicationof the user orservice provided provider to external without agencies any legal without ability to monitor or enforce in case of breach or suspected breach of trust in data protection. While local hosting requirements by application service providers have been resorted to by some countries, such conditions are generally termed to be onerous for conduct of legitimate businesses. Therefore, there is a need for a balance to be drawn to retain the country’s ability to protect the privacy of its citizens and data protection without rendering it difficult for business operations. One possibility is to identify critical and important areas through public consultations where there may be a requirement to mandate local hosting or retaining enforcement capabilities in cases of breach.

14.7 Some of the security related measures may be in the nature of ex ante obligations (lawful interception, security audit etc) whereas others would be in the nature of ex post enforcement (public order, prohibited content, protection of privacy, data protection). It is, therefore necessary for duly authorised legal entities to have the ability to seek implementation of the ex ante obligations and ensure ex post enforcement. With the rapid transformation of the ICT and the expected emergence of new forms of

for meeting the challenges to security. communications, there is probably a need to define a new legal architecture 14.8 The Committee believes that national security is paramount, regardless of treatment of Net Neutrality. It therefore recommends inter- ministerial consultations to work out measures to ensure compliance of security related requirements from OTT service providers.

78 NET NEUTRALITY - DoT Committee Report - May 2015

CHAPTER 15

ENFORCEMENT, OVERSIGHT & CAPACITY“A good plan implemented BUILDING today is better than a perfect plan implemented tomorrow.”

— GEORGE PATTON

15.1 The ongoing debates and brainstorming on various issues encompassing Net- Neutrality are still in a formative stage, and likely to throw new challenges for regulators and policy makers in time to come. Since Net-Neutrality has many dimensions impacting economic, regulatory and public policy aspects, there may be instances in various domains such as integrity of the network,

implications of Net Neutrality would require expert examination on case to caseinvestment, basis. For traffic this & purpose, tariff management, we need to privacyput in place & security an enforcement etc. where andthe

mechanism. There is also an urgent need for adequate capacity building acrossmonitoring different system domains with clearlywithin thedefined Government processes and along DoT within particular. an oversight

15.2 Based on the discussions in earlier chapters, the committee suggests the following enforcement process

(i) Core principles of Net Neutrality may be made part of License conditions and the Licensor may issue guidelines from time to time as learning process matures.

(ii) Since Net Neutrality related cases would require specialized ex- pertise a cell in the DOT HQ may be set up to deal with such cas- es. In case of violations, the existing prescribed procedure may be followed. This would involve two stage process of review and appeal to ensure that decisions are objective, transparent and just.

79 Chapter 15 - Enforcement, Oversight & Capacity Building

(iii) Tariff should be regulated by TRAI as at present. Whenever a new tariff is introduced it should be tested against the principles of Net Neutrality. Post implementation, complaint regarding a tariff violating principle of Net Neutrality may be dealt with by DoT.

(iv) Net Neutrality issues arising out of traffic management would have reporting and auditing requirements, which may be performed and enforced by DoT.

(v) QOS issues fall within the jurisdiction of TRAI. Similarly reporting related to transparency requirements will need to be dealt with by TRAI. TRAI may take steps as deemed fit.

15.3 Enforcing Net Neutrality principle is a new idea and may throw up many questions and problems as we go along. Learning and course correction will have to be built in the system itself. For this purpose, a strong Oversight mechanism will be needed. The Committee recommends that a Oversight process may be set up by the government to advise on policies and processes, review guidelines, reporting and auditing procedures and enforcement of rules.

15.4 Technological advances can be disruptive. Cost for not being prepared for

priorities, focus and capacity building within the government, licensing authoritysuch disruptive (DoT) changesin particular, can be so steep. that it It may is the facilitate right time the Indianfor fine consumers, tuning the investors, telecom companies, government organizations and all other stakeholders in facing technological changes and challenges.

15.5 This capacity building within the DoT will enable it to address issues at stake. First step in this direction would be substantive engagement in discussions with academia, private sector, and civil societies; taking timely action of referring such issues to regulatory bodies and enforcement agencies concerned, and more importantly taking informed decisions, inter-alia,

the other stakeholders. At times, the government will also need to engage in based on the recommendations of such bodies and/or consultation with

15.6. Anotherdiscourse importantwith outside aspect experts, of tocapacity facilitate buildingthe free flowis trainingof ideas. and skill development. Training needs should cover not only technical aspects but

80 ChapterNET NEUTRALITY 15 - Enforcement, - DoT Committee Oversight &Report Capacity - May Building 2015

governance, policy, law and other related areas as well. There are plenty of training and skill development needs of the entire ICT sector, which is beyond the scope of this committee. However, we would like to comment that while India makes software for the world, the Internet content especially in Indian Languages is very less. Encouraging local content creation through skill development may help achieve the objective of localization of content better than through any regulation.

15.7 Institution building is also part of capacity building. Within DOT, Telecom Engineering Centre needs upgradation and orientation in terms of technical know-how, improved human resource and internet engineering capabilities,

sectors. The training institute of DoT, National Telecommunication Institute forto addressPolicy Research, technical Innovation issues in the and field Training of Internet (NTIPRIT) and convergingwill also need ICT to be strengthened in the area of Internet Policy, law and regulations and futuristic technologies. Collaboration with academia and private sector will be essential in this endeavour. The committee also recommends setting up of a think-tank with best talent to deal with the complexities of the new digital world.

15.8 In the recent Net Neutrality debate, it has been seen that there is unexpected awareness about the subject, especially amongst the youth. This needs to be channelized to create positive energy. Creating awareness through training programmes, seminars and workshops about opportunities and responsibilities that internet brings is a timely requirement.

81 CHAPTER 16 WAY FORWARD

“The only limit to our realization of tomorrow will be our doubts of today”

— FRANKLIN D. ROOSEVELT

16.1 Digital connectivity has emerged as a key driver of economic and social de- velopment in an increasingly knowledge intensive global scenario. India needs to play a leadership role in ushering a new digital age. Government of India has initiated the programme of Digital India, which is designed to transform India into a digitally empowered society and knowledge econo- my. The program envisages digital connectivity to citizens as a public utility. This provides us a guiding benchmark against which to measure the issues related to Internet space.

16.2 Internet has also emerged as a destination for public discourse. In a free, democratic country, the Internet has increasingly become an important platform of information dissemination and exchange of opinions and views.

expression, it also values an Internet that is open. The resulting discourse onJust Net as NeutralityIndia values has its led constitutional to an intense guarantees debate that of is freedom refreshing, of speech timely and welcome.

16.3 The debate on Net Neutrality is refreshing because it is about future and not about past or present. It is about young and their enterprise. It is also about the success in putting the infrastructure on ground and the ground that we still have to cover. It is about freedom and equality as much as it is about

multi-dimensional and solution to this cannot therefore be uni-dimension- regulational. The way and forward level is playing the quest field. for Clearly, these multi-dimensional the debate on Net solutions Neutrality with is a holistic, national outlook to the vexed issue of Net Neutrality.

82 NET NEUTRALITY - DoT CommitteeChapter Report 16 - Way - May Forward 2015

16.4 At the root of our discourse is the recognition that we have different stakeholders with different perspective and sometimes diametrically opposite views and prescriptions. This Committee has tried to assimilate these vastly differing opinions and objectives and arrive at its recommendations. On the Net Neutrality continuum, the Committee has sought to carve its own path in comparison to international responses. India is the land of

Path are important - right understanding, right thought, right speech, right action,Buddha right who mindfulnesspreached the and Middle right Path. efforts. Some In tenetsthe context of His of Eightfold Net Neutrality, Middle the approach of the Committee has been as follows:

i. Right Understanding – Understanding needs of all stakeholders, their views and concerns, participative policy formulation

discriminatory and inclusive Internet ii. Right Thought – Build and support an open, free, innovative, non- iii. Right Speech – No throttling and blocking of the lawful content on the net. Support freedom on the Internet with reasonable safeguards within constitutional parameters.

iv. Right Action – Enshrine core principles of Net Neutrality in current operable mechanism. Use well established processes for implementation, enforcement and oversight

management but disallow paid prioritisation. Prescribe and ensure v. Rigrightht QOS Mindfulness and transparency – Provide requirements for reasonable and legitimate traffic

vi. Right Livelihood – Promote innovation as well as investment. User rights and business models align to deliver progress. Test tariffs against core principles of Net Neutrality

vii. Right Concentration – Keep watch on disruptive changes that technology brings and adapt. Level playing issues need level headed approach

viii. Right Efforts – Leave infrastructure development and application or content development to those who are best capable of doing it.

Regulatory boundaries between the two should be finely calibrated. Build capacity and capability within. 83 Chapter 16 - Way Forward

16.5 In order to follow this Middle Path, in order to explore the best possible options to create a virtuous cycle, we must embrace change and move for- ward and towards Dharma i.e. maintaining transparency, neutrality, priva- cy, security and the democratic fabric of the Internet. At times, philosophy provides answers to the larger questions of freedoms, equality and choice raised by disruptions through advancements in technology and commerce. The Committee hopes that this philosophy has imbued its approach to its recommendations on the issue of neutrality of the Internet.

84 NET NEUTRALITY - DoT Committee Report - May 2015

CHAPTER 17 SUMMARY OF RECOMMENDATIONS

“Grant me the serenity to accept the things I cannot change, the courage to change the things I can, and the wisdom to know the difference.”

— REINHOLD NIEBUHR

While the recommendations with context have been provided in various chapters of the report, same are being summarized below for the sake of convenience-

1. The Committee unhesitatingly recommends that “the core principles of Net Neutrality must be adhered to.”

2. The international best practices along with core principles of Net Neutrality

take a rational approach and initiate action in making an objective policy, will help in formulating India specific Net Neutrality approach. India should consideration the exponential growth of content and applications on the Internet.specific to the needs of our country. The timing for this is apt, taking into

3. Innovation and infrastructure have both to be promoted simultaneously and neither can spread without the other. The endeavor in policy approach should be to identify and eliminate actions that inhibit the innovation abilities inherent in an open Internet or severely inhibit investment in infrastructure.

4. The primary goals of public policy in the context of Net Neutrality should be directed towards achievement of developmental aims of the country by

facilitating “Affordable Broadband”, “Quality Broadband” and “Universal Broadband” for its citizens. restrict the ability of the user to send, receive, display, use, post any legal 5. content,User rights application on the Internet or service need on the to beInternet, ensured or sorestrict that TSPs/ISPsany kind of dolawful not Internet activity or use. 85 Chapter 17 - Recommendations

6. OTT application services have been traditionally available in the market for some time and such services enhance consumer welfare and increase productivity. Therefore, such services should be actively encouraged and any impediments in expansion and growth of OTT application services should be removed.

7. There should be a separation of “application layer” from “network layer” as application services are delivered over a licensed network.

interfered with through regulatory instruments. 8. Specific OTT communication services dealing with messaging should not be

arbitrage wherein such services also bypass the existing licensing and 9. In case of VoIP OTT communication services, there exists a regulatory providers both competing for the same service provision. Public policy responseregulatory requires regime creatingthat regulatory a non-level arbitrage playing does field not between dictate TSPs winners and OTTand losers in a competitive market for service provision.

requires a graduated and calibrated public policy response. In case of OTT 10. The existence of a pricing arbitrage in VoIP OTT communication services However, in case of domestic calls (local and national), communication servicesVoIP international by TSPs and calling OTT communication services, a liberal services approach may be may treated be similarly adopted. from a regulatory angle for the present. The nature of regulatory similarity, the calibration of regulatory response and its phasing can be appropriately determined after public consultations and TRAI’s recommendations to this effect.

11. For OTT application services, there is no case for prescribing regulatory oversight similar to conventional communication services.

“tested” against the core principles of Net Neutrality. General criteria against 12. whichLegitimat thesee traffic practices management can be tested practices are as follows: may be allowed but should be

a) TSPmaintains/ISPs transparency should make and adequate allow users disclosures to make informed to the users choices about their traffic management policies, tools and intervention practices to

in nature may not be permitted. b) Unreasonable traffic management, exploitative or anti-competitive 86 NET NEUTRALITY - DoTChapter Committee 17 - ReportRecommendations - May 2015

c) In general, for legitimate network management, application-agnos-

tic control may be used. However, application-specific control within the “Internet traffic” class may not be permitted. - ful access to the type and contents of an application in an IP packet. d) Traffic management practices like DPI should not be used for unlaw e) Improper (Paid or otherwise) Prioritization may not be permitted

f) Application-agnostic congestion control being a legitimate require- ment cannot be considered to be against Net Neutrality. However

against the principles of Net Neutrality. application-specific control within the “Internet traffic” class may be g) Mechanism to minimize frivolous complaints will be desirable.

building is needed before undertaking such an exercise. 13. Traffic management is complex and specialized field and enough capacity 14. CDN is an arrangement of management of content as a business strategy and does not interfere with others business. Making available one provider’s CDN to others on commercial terms is a normal commercial activity. It should at best be covered under law related to unfair trade practice.

15. Managed services are a necessary requirement for businesses and enterprises, and suitable exceptions may be made for the treatment of such services in the Net Neutrality context.

16. This Committee refrains from making any specific recommendation on search-neutrality, however, flags this issue as a concern for public policy. Neutrality set forth in guidelines issued by the Government as Licensor. TRAI 17. Tariff plans offered by TSPs/ISPs must conform to the principles of Net tariff plan conforms to the principles of Net Neutrality. may examine the tariff filings made by TSPs/ISPs to determine whether the 18. Content and application providers cannot be permitted to act as gatekeepers and use network operations to extract value in violation of core principles of Net Neutrality, even if it is for an ostensible public purpose.

19. A clause, requiring licensee to adhere to the core principles of Net Neutrality,

as specified by guidelines issued by the licensor from time to time, should be incorporated in the license conditions of TSP/ISPs. The guidelines can 87 Chapter 17 - Recommendations

describe the principles and conditions of Net Neutrality in detail and provide applicable criteria to test any violation of the principles of Net Neutrality.

20. New legislation, whenever planned for replacing the existing legal framework, must incorporate principles of Net Neutrality. Till such time as an appropriate legal framework is enacted, interim provisions enforceable through licensing conditions as suggested by the Committee may be the way forward.

21. National security is paramount, regardless of treatment of Net Neutrality. The measures to ensure compliance of security related requirements from OTT service providers, need to be worked out through inter-ministerial consultations.

22. Suggested enforcement process is as follows:

(i) Core principles of Net Neutrality may be made part of License conditions and the Licensor may issue guidelines from time to time as learning process matures.

(ii) Since Net Neutrality related cases would require specialized expertise, a cell in the DoT HQ may be set up to deal with such cases. In case of violations, the existing prescribed procedure may be followed. This would involve two stage process of review and appeal to ensure that decisions are objective, transparent and just.

(iii) Tariff shall be regulated by TRAI as at present. Whenever a new tariff is introduced it should be tested against the principles of Net Neutrality. Post implementation, complaint regarding a tariff violating principle of Net Neutrality may be dealt with by DoT.

reporting and auditing requirements, which may be performed and (iv) enforcedNet Neutrality by DoT. issues arising out of traffic management would have

(v) QoS issues fall within the jurisdiction of TRAI. Similarly reporting related to transparency requirements will need to be dealt with by

23. EnforcingTRAI. Net TRAI Neutrality may take principle steps as is deemed a new idea fit. and may throw up many questions and problems as we go along. For this purpose, an oversight process may be set up by the government to advise on policies and processes,

88 NET NEUTRALITY - DoTChapter Committee 17 - ReportRecommendations - May 2015

review guidelines, reporting and auditing procedures and enforcement of rules.

24. Capacity building through training, institution building and active engagement with stakeholders is essential. In order to deal with the complexities of the new digital world, a think-tank with best talent may also be set up.

89 ANNEXURE-I NOTIFICATION OF GOVERNMENT

Government of India

Department of Telecommunications MinistryNew of Communications Delhi-110001 & IT

No. 12-30/NT/2015/OTT Dated 19.01.2015

Subject: Constitution of Committee on net-neutrality. A committee consisting of following members has been constituted with the approval of Competent Authority on net-neutrality : 1. Shri A.K. Bhargava, Member (T) - Chairman 2. Shri A.K. Mittal, SrDDG, TEC - Member 3. Shri Shashi Ranjan Kumar, Jt. Secy (A) - Member 4. Shri V. Umashankar, Jt. Secy.(T) - Member 5. Shri Narendra Nath, DDG(Security) - Member 6. Shri R.M. Agarwal, DDG(NT) - Member & Convenor

Terms of Reference of the committee are as follows:

1. To examine the pursuit of Net Neutrality from a public policy objective, its advantages and limitations. 2. To examine the economic impact on the telecom sector that arises from the existence of a regulated telecom services sector and unregulated content and applications sector including over-the-top (OTT) services. 3. To examine, assess and specify qualifications on the applicability of the principal of net-neutrality from the security, traffic management, economic, privacy and other stand-points. 4. To recommend overall policy, regulatory and technical responses in the light of examination and assessment of the issues in the first three terms of reference.

First meeting of the committee is scheduled on 21.01.2015 at 16:00 hrs in the chamber of Member(T)

Copy to: 1. Sr PPS to Secretary(T): For kind information pl. 2. Sr PPS to Member(T): For kind information & n/a pl. ---sd--- 3. SS(T)/ SrDDG(TEC)/Jt Secy(A)/ Jt Secy (T)/ DDG(Security): (R.M. Agarwal) For kind information & making it convenient to attend the DDG (NT) 90 meeting on 21.01.2015 NET NEUTRALITY - DoT Committee Report - May 2015

ANNEXURE-II LIST OF INVITEES / PARTICIPANTS

1. Centre for Internet and Society CIVIL SOCIETY/ ACADEMIA / MEDIA 2. Software Freedom Law Centre 3. Akshara Foundation 4. Internet Democracy Project 5. Digital Empowerment Foundation 6. IT for Change (ITfC) 7. Media for Change 8. National Foundation of Citizen Rights 9. Medianama.com 10. PLR Chambers 11. Mobilelaw.Net 12. LEGAL ERA 13. Seth Associates 14. National Law School of India University 15. ICMR 16. Tele Users Group of India(TUGI) 17. 18. (PTCConsumer India UnityFoundation) & Trust Society(CUTS) 19. SavetheinternetPacific Telecommunications Council India Foundation 20. Press Club of India 21. Ford Foundation 22. Indian Institute of Technology Delhi 23. National Law University, New Delhi 24. Indian Institute of Management, Ahmedabad 25. Delhi School of Economics, New Delhi 26. Shri Ram College of Commerce, New Delhi 27. Delhi Centre for Digital Economy Policy research / Dept of Mgmt Studies,IIT 91 28. Delhi 29. ISOCAJK Mass Communication Research Centre, Jamia Milia University, New 30. APNIC 31. India.com 32. 33. Legal and academic expert B.K. Syngal, Dua Consulting 34. DSCI 35. SFLC 36. Naresh Ajwani 37. World Wide Web Foundation 38. Oxford Internet Institute

Government MULTI-STAKEHOLDER ADVISORY GROUP 39. Secretary, DeitY 40. 41. JS (CT-CS & PP & R), Ministry of External Affairs 42. Joint Secretary (P&A), Ministry of Information & Broadcasting 43. Director, National Security Council Secretariat Joint Secretary(T), Department of Telecommunications 44. 45. JS (PS-II), Ministry of Home Affairs 46. Deputy LA, Department of Legal Affairs Joint Secretary, Trade Policy Division, Department of Commerce Private Sector 47. Mr. Sujith Haridas, Deputy Director General, Confederation of Indian Industry (CII) 48.

(FICCI)Mr. Vikram Tiwathia, Member, Communications & Digital Economy 49. NationalCommittee, Association Federation of Software of Indian and Chamber Services of Companies Commerce (NASSCOM) & Industry 50. Associated Chamber of Commerce and Industry in India (ASSOCHAM) 51. Mr. Rajesh Chharia, President, Internet Service Providers’ Association of India (ISPAI) 52. Mr. Rajan S Mathews, Director General, Cellular Operators Association of India (COAI)

92 NET NEUTRALITY - DoT Committee Report - May 2015

53. Dr. Subho Ray, President, Internet and Mobile Association of India (IAMAI) 54. Mr. Pankaj Mohindroo, National President, Indian Cellular Association (ICA) 55. NK Goyal ,Chairman, Telecom Equipment Manufacturers Association (TEMA) 56. 57. Mr. Tapan K Patra, Director, Association of Competitive Telecom OperatorsAssociation (ACTO) of Unified Telecom Services Providers of India (AUSPI) 58. India (DSCI) 59. CMAIDr. Kamlesh Bajaj, Chief Executive Officer, Data Security Council of Civil Society 60. Director, Centre for Science Development and Media Studies (CSDMS) 61. Foundation (DEF) 62. Mr. Osama Manzar, Director & Founder, Digital Empowerment 63. Pranesh Prakash., Executive Director, Centre for Internet and Society (CIS)Mr. Parminder Jeet Singh, Executive Director, IT for Change (ITfC) 64. Director, Internet Society (ISOC) 65. Mr. Prasanth Sugathan, Counsel, Software Freedom Law Centre 66. Change AcademiaMs. Subi Chaturvedi, Founder & Hon. Managing Trustee, Media for 67. 68. Professor Huzur Saran, Indian Institute of Technology Delhi Prof. D Manjunath, Indian Institute of Technology Bombay 69.

70. Ms.Dr. V. Chinmayi Sridhar ,Arun, International Assistant Institute Professor of ofInformation Law and Research Technology, Director,Bengaluru National Law University, New Delhi 71. Ahmedabad 72. Professor Rekha Jain, Indian Institute of Management, 73. Centre for WTO Studies (CWTOS), IIFT Professor Rahul De’, Indian Institute of Management, Bengaluru

93 Technical Community 74. CEO, National Internet Exchange of India (NIXI) 75. DG, National Informatics Centre (NIC) 76. Scientist ‘G’, Indian Computer Emergency Response Team (I-CERT) 77. Executive Director,Centre for Development of Advanced Computing (C-DAC) 78. ASSOCIATIONS Joint Secretary (Internet Governance), DeitY 79. AUSPI 80. CMAI 81. COAI 82. ISPAI 83. NASSCOM 84. OSPAI 85. TEMA 86. ACTO (Association of Competitive Telecom Operators) 87. IAMAI 88. ITU-APT Foundation of India 89. Cyber Café Association of India 90. ICA 91. CII 92. ASSOCHAM 93. FICCI 94. Telecom System Design Manufacturers Association (TSDMA) 95. GSMA 96. PHD Chambers 97. 98. CABLE OPERATORS FEDERATION OF INDIA (COFI) 99. CEAMA News Broadcasters Association(NBA) 100. M2M Paper 101. TAIPA 102. Star India 103.

Indian Broadcasting Foundation 94 NET NEUTRALITY - DoT Committee Report - May 2015

E-commerce OVER-THE-TOP SERVICE PROVIDERS 104. Flipkart 105. Indiatimes Shopping 106. Letsbuy.com 107. Snapdeal 108. aaramshop.com 109. 110. PayU Jabong 111. Groupon 112. Zomato 113. PayTM 114. Amazon 115. ebay 116. one 97 117. CommonFloor.com Social Networking 118. 119. Google Viber 120. Facebook 121. Skype Travel 122. Zoomcar 123. Cleartrip 124. MakeMyTrip India Pvt. Ltd 125. Travelocity 126. Yatra.com Others 127. Air2Web 128. IMI Mobile 129. india games limited 130. Inspira 131. packet shaper technologies

95 132. Naukri.com 133. Owntastic 134. Coupik.com 135. adonstream.com 136. Zapak 137. Hungama 138. ibibo web 139. Edureka 140. Localbanya.com 141. Triveous 142. NetApp India pvt. Ltd. 143. Intel 144. Smartprix.com 145. Microsoft

146. Aircel TELECOM SERVICE PROVIDERS / INTERNET SERVICE PROVIDERS 147. Airtel 148. 149. IDEA Cellular Limited BSNL 150. MTNL 151. Reliance Communication Ltd 152. 153. SSTL Reliance Jio Infocomm Ltd 154. Tata TeleService Limited 155. 156. Uninor Vodafone 157. 158. Tata Communications Limited Videocon 159. Data Infosys Limited 160. Software Technology Parks of India, 161. Opto Network Pvt. Ltd 162. Siti Cable Network Limited 163. Dishnet Wireless Ltd 164. 96 Vodafone Spacetel Limited NET NEUTRALITY - DoT Committee Report - May 2015

ANNEXURE-III LIST OF RESPONSES RECEIVED

SL. No. 1 Organisation/ Individual 2 NASSCOM - National Association of Software and Service Companies AUSPI - Association of Unified Telecom Service Providers of India 3 ISPAI - Internet Service Providers Association of India 4 ACTO - Association of Competitive Telecom Operators 5 ASSOCHAM 6 GSMA 7 IAMAI - Internet and Mobile Association of India 8 COAI - Cellular Operators Association of India 9 OSPAI - Other Service Providers Association of India 10 IAFI - ITU-APT Foundation of India 11 Idea Cellular 12 13 Reliance Vodafone 14 Aircel 15 MTNL 16 MTS 17 Uninor 18 TATA Communications 19 Mr Rajeev Chandrasekhar, MP, Rajya Sabha 20 21 MediaNama.com Dr. Jitendra Awhad, MLA, Maharashtra 22 23 DUA Consulting Pvt Ltd S.C.Bharadwaj 24 National Law University (NLU- CCG) 25 Telecom Watchdog 26 Infocom Think Tank 27 28 Dr D. Manjunath IIT Bombay Bhaskaran Raman Prof IIT Bombay & 52 others 97 29 IT for change 30 Mr Mahesh Sharma, MP 31 World Wide Web Foundation 32 DS Cell, DoT 33 DDG AS 34 CEO NIXI 35 TRAI 36 Facebook 37 Aravind Ravi Sulekha 38 39 Rahul Chavan Jame Wilwo 40 41 Ashok Kumar Bhuvnesh Thakar 42 N K Mathur (Infocomm Think Tank) 43 Guns Down 44 45 tushar bhandari navdesk vikatan (Ananda Vikatan Publishers Pvt Ltd) 46 Samanvai Chaturvedi 47 Anil Kumar 48 Abhijeet Apsunde 49 50 Amitabh Satyam Vivek Ananth 51 Gaurav Gautam 52 53 Iza Maryam Srinath Beldona 54 Akshat Sahu 55 56 Kalyan Tudy Abhinav Juneja 57 Ish Goel 58 59 Raghvendra sudhir Deep Bhatnagar 60 Kumar Suyash 61 Srivatsa Sharma

98 NET NEUTRALITY - DoT Committee Report - May 2015

62 Peter Dunn 63 K S Raju 64 65 Tejas thakker Astha Vyas 66 Aditya Kashyap 67 Yogesh G Krishnan 68 Aditya Rai 69 Karthik Keyan 70 Dhananjay Devasper 71 prateek singhal 72 Ritesh Singh Sikarwar 73 pritam biswas 74 Ashwani Kumar Singh 75 76 Abhijeet Apsunde Shailendra Bhide 77 ankush chopra 78 Shanmugavel 79 80 Raman dhillon Aastik Bhushan 81 Abhay Sehgal 82 Gurpreet Singh 83 84 Siddharth Coelho-Prabhu Arun Jayaprakash 85 Sadananda Aithal 86 Sagar Dhotre 87 Yogi Raj 88 Tathagata Satpathy (Member of Parliament Lok Sabha Dhenkanal Orissa) 89 Sauhard Nagpal 90 91 Change.org Rahul Verma 92 93 Premal Shah Prashant Verma

99 94 Ramakant Pradhan 95 Shivam Tripathi 96 97 S.K.Bhanja 98 Sai Sarkar Kamlesh Jain 99 Nishant Saxena 100 Abhishek 101 Dhruv Aggarwal 102 Shashank Kothi 103 Ajit Raina 104 Change.org 105 Shubham Agarwalla 106 Naveed M 107 Shyam Sundar 108 Abhishek Srivastava 109 Mrigesh Priyadarshi 110 Abhishek kumar 111 Abhi Kumar 112 Pravin 113 114 Akhil Singh Vipin Nair 115 Anurag 116 Purbey 117 Prashant Priyadarshi 118 Matu Agarwal 119 Paritosh Mathur 120 Chethansagar 121 Shashank Kothi 122 Girish Lolage 123 Aswin 124 125 parth patel Sandeep Verma 126 Piravi Perumal, Chairman, Consumer Watchdog

100 NET NEUTRALITY - DoT Committee Report - May 2015

127 K R Prakash 128 Sandeep Mohanty 129 130 Vaidyanathan Vallaban 131 Narendra K V 132 Shravan Vallaban 133 Amarnath R Aurif Bin Thaj 134 Chaitanya Kamat 135 Dinesh Itankar 136 Harpal 137 Ketan gupta 138 Farhaan Ginwala 139 Sridharan S. 140 Aditya Gupta 141 Mita Shenai

101 ANNEXURE-IV SUGGESTED GUIDELINES 1. authorised to provide internet services within the jurisdiction of India, under The guidelines specified herein may apply to all licensed service providers 2. The licensees will follow the Net Neutrality core principles. 3. Anvarious indicative licensing list regimes of criteria of (UASL/ISP/UL to be used for etc.) testing of Government the core ofprinciples India. are described below: User Rights Subject to lawful restrictions, the fundamental right to freedom of expression and non-discriminatory access to the internet will apply Content Right to create and to access legal contents without any restrictions

Devices Freedom to connect all kinds of devices, which are not Application & Services harmful,Freedom toto thecreate network and access and services any Application & Service No blocking of any lawful content Throttling Blocking application, services or end user Prioritization No degradationpaid prioritization of internet which traffic creates based discrimination on the content, Transparency Transparent disclosure of information to the users for enabling them to make informed choice Competition Competition to be promoted and not hindered

Management to ensuring core principles of Net-Neutrality QoSCongestion and Traffic QoSReasonable to be ensured and legitimate as per besttraffic practices management and national subject regulations Interconnection

andBroad intervention monitoring only to ensure when needed.Interconnection happens Privacy Onlinebetween privacy ISPs/CP/APs of the individuals as per need to be and ensured regulations, Security Scrupulously follow the extant security guidelines Data Protection Disclosure of user information only with consent of the user or on legal requirements

Note: (i) These guidelines are not applicable for OTT application providers and managed services provided by TSPs. 102 (ii)

Enforcement process will be as prescribed by DoT/TRAI from time to time. NET NEUTRALITY - DoT Committee Report - May 2015

GLOSSARY

AGR Adjusted Gross Revenue

BEREC Body of European Regulators for Electronic Communications CDN Content Distribution Network BSO Basic Service Operator CDR Call Data Records CMSO Cellular Mobile Service Operator CPE Customer Premises Equipment DOS Denial of Service DOT Department of Telecom DPI Deep Packet Inspection DRM Digital Rights Mechanism ITU-Recommendation : The International Public E.164 Telecommunication Numbering Plan E-Commerce Electronic Commerce, also known as eCommerce FCC Federal Communications Commission FDI Foreign Direct Investment GSM Global System Mobile ICANN Internet Corporation for Assigned Names and Numbers ICT Information Communication and Technology IETF Internet Engineering Task Force ILDO International Long Distance Operator IMT-2000 International Mobile Telecommunications for the year 2000 (3G) IoT Internet of Things IP Internet Protocol IPDR IP Data Records Internet Protocol Television ISP Internet Service Provider IPTV IT Act Information Technology Act ITU International Telecommunication Union ITU-T Recommendation on End user multimedia QoS ITU-T G.1010 categories

103 LEA Law Enforcing Agency LI Lawful Interception LSA Licensed Service Area LTE Long Term Evaluation LTSP Licensed Telecom Service Provider MAG Multistake Advisory Group

MOU Minutes of Usage MB Mega Byte=1024 Kbytes, 1 Kbyte=1024 Bytes NIXI National Internet Exchange of India NLDO National Long Distance Operator NN Network Neutrality, popularly known as Net Neutrality NPT Norwegian Post and Telecommunications Authority National Telecommunication Institute for Policy Research, NTIPRIT Innovation and Training OSP Other Service Provider OTT Over –The-Top P2P Point to Point PLMN Public Land Mobile Network PMRTS Public Mobile Radio Trunk Service PSTN Public Switched Telephone Network QoS Quality of Service SIP Session Initiation Protocol SLA Service Level Agreement SMS Short Messaging Service TERM Telecom Enforcement Resource Management TRAI Telecom Regulatory Authority of India TSP Telecom Service Provider UASL

Unified Access Service Licence VoD Video on Demand VoIP Voice over Internet Protocol VPN Virtual Private Network

104 NET NEUTRALITY - DoT Committee Report - May 2015

REFERENCES 1) European Parliament - DIRECTORATE GENERAL FOR INTERNAL POLICIES - Network Neutrality: Challenges and responses in the EU and in the U.S.

2) initiativesBCG – IAMAI along : India these @ linesDigital Bharat 3) BEREC - BEREC’s comments on the ETNO proposal for ITU/WCIT or similar restrictions to the open Internet in Europe 5)4) ETNOBEREC paper - A viewon Co ofntribution traffic management to WCIT - andITRs other Proposal practices to Address resulting New in Internet Ecosystem 6) Net Neutrality and the value chain for video - Pieter Nooren, Andra Leurdijk,

14 Iss: 6, pp.45 – 58 7) Nicowww.internetlivestats.com van Eijk, (2012) “Net Neutrality and the value chain for video”, info, Vol. 8) US – Federal Communication Commission documents : FCC-15-24A1, FCC- 15-24A2, FCC-15-24A3, FCC-15-24A4, FCC-15-24A5, FCC-15-24A6, DOC- 332260A1, FCC-10-201A1

11)9) Subsidizinggolden-frog-comments-fcc-gn-14-28-final Creativity through Network Design: Zero-Pricing and Net 10) NeutralityAT&T document - Robin att.paid.prioritization.letter.fcc.083110 S. Lee and Tim Wu 12) The Network Neutrality Debate and Development- www.diplomacy.edu 13) akamai’s [state of the internet] - q4-2014-soti-report

14) VOICE OVER INTERNET PROTOCOL: AN INTERNATIONAL APPROACH TO from-countries-which-have-made-it-into-a-law-263072.htmlREGULATION Jimar Sanders* 16)15) McKinsehttp://tech.firstpost.com/news-analysis/net-neutrality-some-insights-y Global Institute Internet matters: The Net’s sweeping impact on growth, jobs, and prosperity 17) ITU Workshop on “Quality of Service and Quality of Experience of Multimedia Services in Emerging Networks”

19) Network Neutrality and the IETF - Mark Handley 18) Findings from BERECs and the ECs joint investigation

20) Response from DIGITALEUROPE to BEREC 21) http://usoecd.usmission.gov/mission/overview.html 22) http://webfoundation.org/2015/04/net-neutrality-india/ 23) https://www.ourinternet.org/publication/toward-a-social-compact-for- 105 digital-privacy-and-security/ 25) http://www.itu.int/wsis/docs/geneva/official/dop.html : Declaration of Principles 24) Net Neutrality and Investment Incentives- Jay Pil Choiy Byung-Cheol Kimz

--governance-promoting-innovation Building the Information Society: a global challenge in the new Millennium 27)26) UNESChttp://www.brookings.edu/blogs/techtank/posts/2014/06/2-internet-O - Communication and Information - Freedom of Expression on Internet

28) http://www.internetsociety.org/blog/public-policy/2014/12/freedom- expression-online-finding-appropriate-balance 29) http://en.collaboratory.de/w/The_Internet,_Freedom_of_Expression_and_ Democracy_-_Connecting_our_Rights 30) http://internetdemocracy.in/issues/freedom-of-expression/ 31) https://foeonline.wordpress.com/ 32) http://www.unesco.org/new/en/communication-and-information/ mapping-internet-rights-and-freedom-expressionfreedom-of-expression/freedom-of-information/ 33) http://www.giswatch.org/mapping-democracy/freedom-expression/

34) PACIS 2009 Proceedings - THE VERTICAL INTEGRATION OF CONTENT AND BROADBAND SERVICES: THE NET NEUTRALITY DEBATE 36) 35) IsrNetael Neutrality, Press Release Business - Knesset Models, plenum and Internet approves Interconnection_ Telecom Network Jay Neutrality Pil Choiy billDoh-Shin Jeonz Byung-Cheol Kimx March 24, 2014 37) ITU – ICT Facts and Figures

39)38) TheNetw Forkour Digital Neutrality Divides in JapanKenneth - Presentation Keniston and ofDeepak Norio Kumar Murakami VP and 40) ITUGeneral – Cor Managere ICT Indicators Google Japan

42) Internet Society – Global Internet Report 2014 43) 41) TIntelecomernet StatsRegulatory Today - TheAuthority Internet of World India Stats -The Blog Indian Telecom Services Performance Indicators 44) World Wide Foundation – The Web Index

Applied Science and Technology 46) 45) ARNetCEP Neutrality (Autorité Issues de régulation in the Developing des communications Nations - International électroniques Journal et des of postes) - Internet and network neutrality Proposals and recommendations 47) Internet Governance in Ecuador: Infrastructure and Access - First National

106 NET NEUTRALITY - DoT Committee Report - May 2015

48) Hogan Lovells Global Media and Communications Quarterly 2014 - Mexico adoptsSummit one on Internetof the strictest Governance Net Neutrality in Ecuador frameworks - by J. Andrés in the Delgado1 world

49) internet-privacy-in-indiaDisruptive Threat or Innovative Opportunity? Arthur D. Little 50) http://cis-india.org/telecom/knowledge-repository-on-internet-access/

51) PwC Mobile Broadband- Outlook 2015 53)52) QoSBroadband Requirements Roadmap of Network for Inclusive Applications Growth on 2009-2014 the Internet Confederation - Yan Chen, Toni of Indian Industry & IMRB International 54) OECD Communications Outlook 2013 Farley and Nong Ye*

55) OECD Digital Economy Papers No. 231 Connected Televisions CONVERGENCE NetworksAND EMERGING BUSINESS MODELS 57)56) OECD DigitalDigital Economy Economy Papers Papers No. No. 239 200 The The Development Impact of of Internet Fixed Broadband in OECD Countries

Growth and Policies in OECD Countries 58) ITU - GSR10 Best Practice Guidelines for Enabling Open Access Broadband 60) 59) ITU – The State of Broadband 2014 : broadband for all 61) NetCOMPARATIVE Neutrality Discourses: NET NEUTRALITY Comparing Network Advocacy Neutrality: and Regulatory Insights Arguments Gained by inJuxtaposing the US and the the U.S. UK and -Alison Korea Powell, Alissa Cooper 62) INTERNET CENSORSHIP IN CHINA: ‘THE GREAT FIREWALL’ Amnesty International

64) Internet Society - Collaborative Security : An approach to tackling Internet 63) SecurityChina’s Internet issues Censorship System Bei Feng - Translation by HRIC

65) Cullen International January 2015 66) TomoakiA Comparison Watanabe of Network Neutrality Approaches in: the U.S., Japan, and the European Union. - Kenneth R. Carter, J. Scott Marcus, Adam J. Peake, and Developing Countries -Christine Zhen-Wei Qiang 67) Broadband Infrastructure Investment in Stimulus Packages: Relevance for 69) WCIT 2012 Quality of Service and “Net Neutrality” 68) NETWORK NEUTRALITY, BROADBAND DISCRIMINATION -TIM WU

107 70) practicesBEREC - A and framework recommended for Quality approaches of Service in the scope of Net Neutrality 72) 71) TheBEREC Net GuidelinesNeutrality Debate on Transparency and the German in the Communications scope of Net and Neutrality: Competition Best Law by Günter Knieps 73) Open Forum Academy (OFA) Net Neutrality in the EU – Country Factsheets

75)74) NationalInternet SocietyTelecom comments Policy 2012 on Draft BEREC Guidelines on Net Neutrality and 76) ITUTransparency: - GSR2012Disc Bestussion practices Paper and : Netrecommended Neutrality: approaches,A regulatory October perspective 2011

77) The Indian Telecom Services Performance Indicators, July - September, 2014;TRAI report Jan 2015 79)78) Thewww.cisco.com/c/en/us/solutions/collateral/service-provider/ip-ngn-ip- observation made in 1965 by Gordon Moore, co-founder of Intel next-generation-network/white_paper_c11-481360.pdf 80) Internet Live Stats (www.InternetLiveStats.com) 81) www.openforumacademy.org 82) TRAI- The Indian Telecom Services Performance Indicators as of Sep 2014 83) Trends in Telecommunications Reform 2013 – Transnational aspects of regulation in a networked society, ITU 84) www.livemint.com 85) Trends in Telecommunications Reform 2013 – Transnational aspects of regulation in a networked society, ITU

86) www.indjst.org/index.php/indjst/article/viewFile/62238/48529 pdf 87) www.ericsson.com/res/docs/2015/ericsson-mobility-report-feb-2015-interim. 88) ITU data base for year 2013 89) HERFINDAHL-HIRSCHMAN INDEX 90) Trends in Telecommunications Reform 2013 – Transnational aspects of regulation in a networked society, ITU 91) Airtel submissions to Committee

93)92) IndianReport Tbyelegraph the Internet Act, 1885. and Mobile Association of India (IAMAI) and IMRB International (a market research firm) 95) Freedom on the Net 2013”: The Global Information Index 2013,Datterg 94) http://commerce.nic.in/wto_sub/cp/sub_cp79.htm analysis

96) Entrepreneurship in India: IJSSIR, Vol. 2 (7), JULY (2013) 108 NET NEUTRALITY - DoT Committee Report - May 2015

98) Avendus Analysis 99)97) TheTech Indian Start-ups App in E cosystemIndia: A Bright by Rajat Future, Kathuria NASSCOM and - SugandhaZinnov report, Srivastav 2014. 100) IAMAI report December,2012

101) interim.pdfGlobal_venture_capital_insights_and_trends_2014 :Ernst & Young 102) www.ericsson.com/res/docs/2015/ericsson-mobility-report-feb-2015- 104) The Indian Telecom Services Performance Indicators, October – December, 103) www.indjst.org/index.php/indjst/article/viewFile/62238/48529 105) Telecom Subscription Data as on 31st March 2015, TRAI report March 2015 106) GSR2015; 2009 TRAI Discussio report Jann Paper- 2015 ITU

108)107) TRAI“The virtuousperformance cycle”, Indicators, Georg Serentschy, Released 8th BEREC May vice2015 chair 2013, published 109) WJulyebindex 2013 Report 2014-15

110) ofBC Technology,G-IAMAI report, Germany, [email protected], published Sept 25, published 2012 January 2015 111) Jan Kramer et. al., “Net Neutrality – A Progress Report”, Karlsruhe Institute

112) IEEE document 802.16sc-99/28, QoS Classes for BWA 113) ITU Report of Broadband Commission, “The State of Broadband 2014” 115) 114) CISC“WanO andWhite Application paper, “CISCO Optimization visual Networking Solution Guide,Index, Chapter-5,Forecasting TrafficIndex 2013-2018Classification”, published by CISCO

Resulting in Restrictions to the Open Internet in Europe, published 29th May 116) 2012BEREC BoR(12)30, A view of Traffic Management and Other Practices 117) ITU – Trends in Telecommunication Reform 2013

118) Ofcom, Net Neutrality and Traffic Management – A discussion document, published 24th June 2010 119) Alex Bowers, International Director, Ofcom, Presentation on Traffic Management and Net Neutrality, 28th July 2010 122) 120) OfTimcom, Wu, Approach A proposal to forNet Net Neutrality, Neutrality, published June 2002 24th November 2011 123) 121) ITU-CISCTO, recommendation Quality of Service G.1010 for Voice over IP, published 30/06/2001

124) World Bank, 2010 World Development Indicators, Published April 2010 109 mass Internet use in emerging markets” 126)125) MartinWhite paper, Schraa, Nokia Cullen Siemens International, Networks, “Net “Affordable Neutrality Access-The – Netherlands first step and to

Division,Slovenia actTelecom on zero Engineering rating”, published Center, 28thDepartment January of2015 Telecommunications, 127) NewStudy Delhi. Paper on “Implementing Quality of Service in IP Networks”- By I

128) Generic Requirements on Integrated Gateway Router - GR No. TEC/GR/IT/ TelecomTCP-005/01 Engineering MAR-14 center, – of TEC, Department DoT New ofDelhi Telecommunications, New Delhi 129) Study Paper on “Interconnect Issues in IP Networks” – By IT Division,

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